End of the US Dollar ****** end of INFLATED USD
Deflation is coming.
Food for thought.
Because THE CYCLES EXIST and THEY RHYME.
Hikes
USDJPY Analysis: Potential Bullish Bias for the Upcoming Week!USDJPY Analysis: Potential Bullish Bias for the Upcoming Week (Sept 23-29, 2024)
As we look ahead to the coming week, USDJPY appears poised for a potential slightly bullish bias. This outlook is based on a confluence of fundamental factors and current market conditions that favor USD strength relative to the Japanese yen. Below is a breakdown of key drivers supporting this outlook, along with insights that could influence price action.
1. Federal Reserve's Hawkish Stance
One of the key drivers for a potential bullish bias in USDJPY next week is the persistent hawkish tone from the Federal Reserve. Although the Fed opted to pause rate hikes in September, policymakers have indicated that they are open to further tightening if inflationary pressures persist. Recent inflation data in the U.S. showed a slight uptick in the Consumer Price Index (CPI), suggesting that the Fed may still consider additional rate hikes in 2024. Higher U.S. interest rates would continue to bolster the U.S. dollar, driving demand for USDJPY as traders seek yield differentials.
2. Bank of Japan's Dovish Policy
In stark contrast to the Fed, the Bank of Japan (BoJ) remains committed to its ultra-loose monetary policy, including negative interest rates and yield curve control. The BoJ's dovish approach continues to weigh on the Japanese yen, especially in an environment where other major central banks are tightening monetary policy. While some market participants expect the BoJ to consider policy changes in the future, there have been no concrete signals indicating a shift in the near term. This widening policy divergence between the Fed and BoJ is a key factor supporting a bullish outlook for USDJPY.
3. Safe Haven Demand Waning
The yen is traditionally viewed as a safe-haven asset, particularly during periods of global market volatility. However, recent market stability, coupled with optimism surrounding global growth prospects, has reduced demand for the yen as a haven. As risk sentiment improves, investors are more likely to allocate capital into higher-yielding assets, which could further weaken the yen.
Moreover, geopolitical tensions that previously supported yen demand have eased slightly, making USDJPY more likely to drift higher in a low-risk environment.
4. U.S. Treasury Yields Rising
Another factor contributing to the bullish bias in USDJPY is the rise in U.S. Treasury yields. Higher yields on U.S. government bonds make the dollar more attractive to foreign investors, adding upward pressure to USDJPY. The correlation between USDJPY and U.S. Treasury yields is well-documented, and as yields rise, so too does the currency pair. Traders will be closely monitoring U.S. economic data next week, including durable goods orders and GDP figures, to gauge the potential for further yield increases.
5. Technical Analysis: Key Support and Resistance Levels
From a technical perspective, USDJPY is trading within a well-defined range, but with a slight bullish bias as long as it holds above key support at the 147.50 level. A break above the psychological 150.00 level could open the door to further upside, with resistance seen at 151.50. On the downside, failure to hold above 147.50 could lead to a test of lower levels around 146.00. Momentum indicators, including the Relative Strength Index (RSI), are currently neutral but leaning slightly toward overbought territory, suggesting room for further gains before a pullback.
6. U.S. Economic Data Next Week
Next week, market participants will pay close attention to several high-impact economic reports out of the U.S., including the Durable Goods Orders on Tuesday and GDP Growth on Thursday. Positive readings on these metrics could fuel further gains in USDJPY, reinforcing the bullish bias. Conversely, any disappointing data could dampen USD strength and lead to some consolidation in the pair.
Conclusion
Given the combination of hawkish signals from the Fed, the BoJ's ongoing dovish stance, rising U.S. Treasury yields, and waning safe-haven demand, USDJPY appears to have a slightly bullish bias heading into next week. Traders should watch for any shifts in risk sentiment or unexpected economic data that could alter this outlook. The key levels to watch are 147.50 for support and 150.00 for resistance.
Keywords: USDJPY forecast, USDJPY bullish, USDJPY analysis, Bank of Japan policy, Federal Reserve rate hikes, U.S. Treasury yields, Japanese yen, safe-haven demand, forex trading, USDJPY technical analysis, USDJPY key levels, USDJPY next week, trading USDJPY.
$QQQ Nasdaq with Rate Hiking Cycle DatesGoing along with my usual 'Key Hidden Levels' in the markets perspective that NEWS is an important price level to mark on charts so it is visible to everyone, I have created the update to the "Rate Hiking Cycle" chart.
The purple triangles and lines are the range of the day of the announcement and the mid-point of the day plotted horizontally forward.
With this data you can see how past levels where the Fed Rate Decision occurred has provided either support or resistance to the movement of the market. Typically it hasn't been as obvious the the observer of a chart all by itself without these markings.
At some point these important news levels will be visible for all of us investors so we can see and understand more quickly how the market is absorbing or dealing with the news.
I hope you enjoy this chart an continue to update it for yourself. I will work to get these dates into the system so you can all see them on every chart.
Wishing you all the best in your investing and trading.
Tim
1:48PM, Thursday May 23, 2024
GBPJPY PULLBACK SCENARIOThe British pound had a strong rally, starting from the ¥175 level and breaking through significant resistance levels. It even surpassed ¥180, a psychologically important mark. However, caution is advised as chasing the trade at these levels is risky. Markets don't go up indefinitely, and a pullback is expected. Lower prices are needed before considering entry. If the pound breaks below ¥175, it may decline towards ¥172.50, then ¥170. Overall, buying on dips seems favorable, and existing long positions require careful trade management.
Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
DXY GAME ON!! SPIKE COMING FOR THE DOLLAR?Last week's surprising jobs report sticky inflation, and persistent and frothy financial conditions may force the Federal Reserve members into a more hawkish position, forcing them to keep the heat on interest rates and the money supply.
Many market participants were looking for a pause in rate hikes as soon as next month and possibly a pivot to lowering rates shortly after. This new data is going against what the Fed was trying to accomplish in this rate hike cycle, which is
to keep inflation within mandated guidelines, and to tame loose financial conditions, dashing the hopes for a pivot in policy anytime soon and pushing that pivot out for far longer than some were expecting. This will put upward pressure on bond yields and a dollar so heavily shorted causing the pivot crowd to close out some of their short positions as the Fed puts the screws to the money supply and inflation. This classic cup and handle setup illustrates the effect the Fed Policy may have on the dollar.
XAUUSD H4 - Short SignalXAUUSD H4 - May look a little bit messy on the face of things, but from swing low data 03/11 up towards swing high dated 16/11, we have started to correct, TP seen from recent analysis yesterday before then climbing higher, but this falls short of our 382, we have since seen a pullback to our H4 break and retest zone (that we have yet to have). From current price, if we see a bounce off DXY support (105 ish) we could see XAU fall further downside towards our 618 target price of $1680. Concerns over this on a fundamental front based on recent headline "The Fed concluded it will "soon be appropriate" to reduce the pace of rate increases, minutes of the November meeting showed. At the same time, some officials noted that the peak rate will be "somewhat higher" than previously expected.". But on a technical front it looks attractive, lets see how the dollar support holds, this may be an opportunity if resistance holds here and DXY D1 support holds.
Weekly gold, another short opportunityTraders will keep eyes on global bond markets for next week because if the Bank of England's strange policies continue, it could help gold to rise
while the Bank of Japan, which is concerned about high prices in USDJPY, should intervene in the forex market. In addition to buying yen, they can sell US bonds in the markets and witness fluctuations in bond yields.
The risk of the economic recession is the driver of the rise of gold. But in the short term, the attention of all traders is on contractionary policies and decisions of central banks, which can put pressure on gold.
As we told you in last week's analysis, any upside movement in gold will be short-term and provide a selling opportunity.
Because the US dollar is in the overbought zone and also the bonds are at their highest points, the take profits have the possibility of raising the price of the gold.
On the other hand, due to the hawkish policies of the central banks as well as the US central bank, this pressure on gold will not be removed
and as long as we observe the rotation of the monetary policies of the central banks, we cannot expect a stable rise for gold.
The world's largest bond market has fluctuated strongly in the last week due to the fear of the British debt crisis.
But, with the intervention of the BOE and the introduction of the government bond purchase program, the treasury bonds' price fall was compensated.
The trend changed as the Bank of England intervened in the bond market and it lowered the yield of American bonds.
Now, in addition to the policies of the Federal Reserve, other central banks also affect bonds and we have to care about them.
As we said in the analysis, gold is bearish in the medium and long term until we see a turn in the contractionary policies of the central banks
But this week due to the upcoming economic data and the possibility of correction of the US dollar index and US bond yields, there is a possibility of gold increase.
However, we predict a turbulent week and our suggestion to traders is to wait this week and sell gold from the high points.
$1700 to $1724 is our sightly range to looking short opportunity to the$1620 area
XRP BREAKOUT TO THE BEARS!The price has officially broken out the consolidation range to the bears. The target point for a reversal is still at at $0.28 however there is a few levels of support before the price reaches this point, these support levels were sourced from the fib retracement of the current wedge formation.
The price has bounced off the golden ratio, (62.8% fib) so the price should sit around this area for a bit before breaking lower, ($0.334-$0.330).
The RSI is also pushing oversold on the 4 hour chart. This is a good indicator as a recovery is in sights.
It can be argued that the reason for the price dump along the whole crypto space is based on the current talks about a interest rate hike by the FED which on top of the previous hike, results in a sell off of traditional stocks and assets as we have seen today.
Feel free to comment your opinion on the matter.
2022 Nasdaq 100 bearish outlookUsing descending channels and 210 MA and also fundamentals with recession fears along with more Interest rate hikes we could see more downside with the Nasdaq 100.
DJI 2022 potential price targetsprice targets between $29k & $27k. with all the recession and inflation fears, markets are bearish for now. As we know there are still rate hikes coming by the Feds and this contributes to a weaker market for conventional stocks and commodities. We have two moving averages and a trendline that price action will have to contend with. Plus, we also see similar patterns with descending channels during this sell-off with the DJI.
Fiber Push higherThe pair is trading in a sideways triangular area,
that doesn't mean it is a golden opportunity to buy , but this is the scenario in which i prefer to go long and target 100% Fibonacci expansion.
excluding Job reports some bad figures are showing up in the United states when it comes to industrial and services growth... thus meaning same/slower pace of tightening.
Euro pair might benefit from any US rate hike that is already discounted in the market. ( 76bps or less).!!
this is my idea in bitcoin for aprilthis is my idea.
i think we have there great RR.
dont forget about rate hikes. :)
BTC vs FED Tightening CycleIn 2017 we saw a BTC peak at the midpoint of the FED tightening cycle, if it is to put in another top, we need to see it within the next 6 months before rates get too punitive on risk-on assets.
Euro Zone inflation at record highs!This is a big issue for the ECB, and they're very much between a rock and a hard place.
For years the bank has kept policy extremely easy, and the economy has largely become used to this.
However, they are now facing an inflation backdrop that ironically, they probably could only dream of 10 years ago (OK maybe not as high as it currently is, but you get the point).
So what do they do from here?
Just now, ECB's Philip Lane said, 'today's inflation number is very high.'
Clearly then, there is a hawkish pivot occurring in the ECB.
And we can see that the market has been pricing *some* hawkishness since the start of the year, if we look at EURIBOR futures...
EUREX:FEU31!
And the current market implied data suggests that the ECB are set to embark on a hiking cycle.
In picture 1, we can see the Euro Area 1wk refi rate, which suggests that by September, at least a 25bp hike is priced in...
Well, that is simply way too late, so think the odds will have been frontloaded way more now.
In chart 2, we can see the overall policy path, which suggests that the ECB will reach a rate of 1.00% by 2024.
And in chart 3, we can see how likely behind the curve the ECB is, especially with today's inflation prints...
There's likely a trade in here then.
If the market is expecting rate hikes further out, but they actually happen sooner, it's likely that European risk assets will be hit, specifically credit and their corresponding spreads.
This would have a knock on effect to equities.
Higher refinancing rates mean tighter margins.
So pay attention to the ECB going forward, since they have the greatest relative policy pivot from historical out of all
central banks!
Bitcoin's Crossroad - FOMC March 2022I believe this is the only way to view what may happen in the near term future with BTC price speculation.
I know twitter is full of perma-bulls saying that 32/33k will never be seen again, they could be correct, but regardless their bias shows because they are making their decision too early...
Perma Bears said we were going to 18-14k even 11k last week on Russia Fears, and the War is turning out to be worse than expected, while the market as well as BTC has shown resiliency in the face of the worst potential conflict in the modern era... Super Power Conflict... even with Gold Spiking... BTC pumps??? (STRANGE)
We will know soon what is going to happen, but anyone calling it today is at best, an over-eager trader. This point today, makes a great short opportunity... March 15th, we will see what happens...
Buy the Rumor, Sell the News? - Goodluck!
(Near Term Short, (1-3 Days out) - 35-37k retest possible... we are at major macro resistance here...
Can technical analysis infer the result of Fed Tightening?This chart uses a simple downtrend in order to predict the terminal fed funds rate, which I believe will be 150-175 basis points by March 2023. As we can see, the previous fed funds rate hikes under the current downtrend have resulted in periods of lower GDP growth as well as yield-curve inversions and very regularly precede lows in total US jobless claims (the two criteria for a slowdown to be considered a recession are two consecutive quarters of lower GDP growth as well as a trough in unemployment). Historically, sharp increases in oil prices have been consistent indicators of economic slowdowns and very rarely move to the upside with a significant degree of magnitude without preceding a recession or at least a period of stock-market volatility.
BoC on Deck this month ... fading corrective rallies in USDCAD=> We still maintain our USDCAD short position from earlier in the week and recommend selling all corrective rallies here ahead of the BoC rate hike widely expected this month.
=> Although the rate hike is expected this trade is far from crowded and we see incoming data to keep the BoC on track with tightening monetary policy.
=> Odds of any hikes are close to 90% probability (in other words it is a done deal) which makes complete sense considering that the decreased political uncertainty allows the BoC to completely focus on better fundamentals when setting policy (a rarity in this world...)
=> We are expecting payrolls to reach 195k and average hourly earnings expected to come in at 2.9% YoY.
=> Markets are expecting a better outcome, especially considering the price action we've seen in US yields and the USD via ADP and ISM employment components.
=> Good luck all trading this live
