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Powell breaks taboo & opens a Pandora's boxThis week Fed Chairman Jerome Powell was speaking to Congress. He the things that may modify the state of the foreign exchange market. It is not about the Fed rates and the monetary policy vector, but about problems that have been trying not to talk about, because attracting attention to them is a very risky idea. We are talking about the so-called “three Ds” which are major US problems and precisely because of which it can collapse into the abyss. They are Government Debt, Budget Deficit, Trade Balance Deficit. In our reviews, we have already mentioned that more than once. The markets preferred to remain silent about “three Ds” existence since this is a time bomb for the US economy It's only a matter of time before it detonates. The US debt exceeds GDP and reached $ 24 trillion, the budget deficit is about a trillion dollars a year, the negative balance of export surplus on an annualized basis has exceeded $ 0.5 trillion. These figures also tend to deteriorate, since the construction of the pyramid of public debt in such conditions is inevitable and sooner or later it will collapse. Sum up, the dollar and the US economy will be under ruins. Therefore the markets are trying not to think about it. However, this week, Powell upset the stability and attracted the attention of markets to the problems of public debt and budget deficits, noting that without their fundamental decision, the US won't help any Fed action. The current rate leaves very little chance for the action of the Central Bank in the event of a crisis. Powell admitted that this time the Fed is unlikely to be able to pull the United States out of depression, as it was in 2007-2009. Focusing on the “three Ds” is a very bad signal for the dollar. If the markets turn their attention to these problems, the dollar may begin a very protracted decline, the bottom of which is simply not visible from the current height. So, our position to sell the dollar has only received additional argumentation. It is worth noting the positive statistics on German GDP. Positive because the country escaped the recession and was able to demonstrate even minimal, but still GDP growth (0.1% with the forecast of -0.1%). The eurozone as a whole also showed GDP growth (0.2% with the forecast of 0.1%). In this light, the current price of the euro seems quite attractive for us to purchase it. The variation of the hundred points is permissible. Remember set up small stops. The pound ignored weak macroeconomic statistics (retail sales appeared worse than expected in the negative zone). Which once again confirms our recommendation to buy a pound at the earliest opportunity. The only threat to the pound is Brexit. But from this side, problems should not be expected until the election results are announced. So we continue to look for points to buy the pound. China showed weak data. Which again renewed the purchase of safe-haven assets. Nevertheless, buying gold or the Japanese yen you should be careful, since any positive news regarding the negotiations between the US and China may stimulate local sales in safe-haven assets.
TVC:DXYShort
by Trade24Fx
Morgan Stanley warns, Powell & inflation under scrutinyThe current week is full of informational events around the oil market. Which continues to play into the hands of sellers. Yesterday, for example, Morgan Stanley analysts warned that if OPEC + participants at their next meeting on December 5 do not announce a higher reduction in production (current volumes of 1.2 million barrels), then Brent quotes will drop to $ 45 (now the price is around 62). That is, the scale of the fall will be about 25-30%. The chances of a new agreement are small, since countries that are not members of OPEC + are increasing production, so it’s not worth counting on the fact that Cartel members will aloud another loses. Accordingly, the downward pressure on oil quotes in December may increase sharply. Recall that this week we revised our intraday asset position and again recommend oil sales. And a few words about the oil market, but in the context of our recommendation to sell the ruble. According to Saudi Aramco, the cost of producing a barrel of oil in Russia exceeds $ 40, two times more compared with Saudi Arabia, and in general, is one of the highest rates in the world (even higher than in the UK and the USA). That is, Russia is one of the most vulnerable countries in the world for falling oil prices. That is why we recommend the sale of the Russian ruble. Meanwhile, ZEW data for the Eurozone as a whole and Germany, in particular, show that economic expectations are still pessimistic, so yesterday's downward pressure on the euro is understandable. The pound reacted quite positively to the statistics on the labour market in the UK, but yesterday there were no strong movements in pound pairs. We continue to wait for news from the Brexit, but for now, there is none - we work with the pound without obvious preferences on the intraday basis - you can buy or sell it, also use the oversold/overbought time zones as guidelines. Today, the reason for the pound volatility jump may be inflation statistics. Given that at the last meeting of the Bank of England Monetary Policy Committee, two members spoke out in favour of lowering the rate, weak inflation data could well trigger a pound decline. We recommend using this for cheaper purchases. Also, data on consumer inflation will be published in the United States. It will be interesting in the context of the fact that in the evening Fed Chairman Jerome Powell will speak to the Congress. The markets are now very concerned about what the Fed is going to do next. The current consensus is a pause in the Fed's actions. But any Powell's allusions to the possibility of an early rate cut will almost certainly provoke a dollar sale in the foreign exchange market.
FX:USOILShort
by Trade24Fx
Uncertainties remain! Dovish statement We just received the 25 basis points rate cut. The market had already priced it in. Powell just released the statement. It seems to be a dovish one . He will start his speech at 2:30pm, where the market will try to understand the possibility of a 4th rate cut in December. The CBOE Fed tool has the 4th cut in December at 26%. We should see the yield curve steepen. ----- Economic reports GDP report was positive/neutral. ADP employment change headlines were good, but analyst are not happy reading into the details.
TVC:TNXShort
by dorfmanmaster
ROKU - Will it fill the gap?Today's market showed some breath, specially for software. Which is normally a growth>value story. $118 is the closing gap resistance. Important market sentiment: Tomorrow October 4th will be a deciding move, as we get the employment report before the open (8:30am ET). With recent continued weak manufacturing data, this employment data could tell us if a recession is coming, and more importantly (short-term), if the FOMC is going to cut rates again. The market has the cut now priced with a probability of 90% at the end of this month.
NASDAQ:ROKU
by dorfmanmaster
1
USDJPY+FOMC+BOJThe chart tells 2 stories. First, the rate drop July 30th. 7 days of strong downward trend, afterward. News spike, comfort zone, FED minutes...........Powell Speaks, the market reverses the following monday. Even though bonds maintained a solid downtrend UJ wanted to recover. As it always does, thats why this pair is the only pair I trade. Its the best for exactly that. But soon I feel this range will end. Allowing Japans currency to continue the rise. This would push Japan to becoming a superpower as their economic model shifts into the new age, leading the way. This of course takes time but moments like these are at the turning points in history, before something big happens? Or will it be where the market just consolidates. After Powell's speech, the market reverses last wednesday sept 18th within range of the HTF downward trend line, on the HTF. Another Rate Drop, right at the same location. The market tries again to break the trend (not really just everyone loading up hahaha), right as Quarles FOMC member makes a public appearance, the market begins to see head winds. And here we are now,
Short
by COGS86
1
Balance, G7 and Jackson Hole outcome, problems of GermanyTrump: China is ready to go back to the negotiating table. China, for its part, reiterated its desire to resolve trade problems through negotiations. safe-haven assets against this background have slightly adjusted and provided excellent opportunities. Despite the optimistic comments from Trump’s side as well as Chinese, everything might change. We have recently observed something similar and buying safe-haven assets tactics on the descents over the past few weeks was the right decision. So our recommendation is to buy gold and the Japanese yen. The only thing, given the increased volatility, do not forget to set stops - it is better to re-enter. The G7 meeting results can be called insignificant. We did not hear any revolutionary statements. So we believe that this event is already “played out” and taken into account. As for the Jackson Hole symposium outcome, there was a lot of concern, but representatives of the Central Banks have stated that crisis and cyclical issues need to be solved not only by monetary methods but also by fiscal ones. Returning to Powell’s speech on Friday, he did not say anything fundamentally new and did not clarify the current state of affairs. Nevertheless, our position on the dollar is unchanged - we are looking for points for its sales. As for the euro. Data on the business climate in the largest economy of the Eurozone (Germany) again frankly disappointed. The IFO business climate index in August came out worse than expected 94.3 with a forecast of 95.1. This is the minimum value for the last 7 years. Therefore, markets expectations as for the monetary policy easing only intensified. So it’s better to wait a while with euro purchases. But its sales against the pound or the Japanese yen look like good trading ideas.
FX:XAUUSDLong
by Trade24Fx
Dollar fails Powell’s test, China and Trump keep tensionsFor the whole last week we were waiting for a symposium in Jackson Hole to be held (The Economic Symposium, held in Jackson Hole, Wyoming, is attended by central bankers, finance ministers, academics, and financial market participants from around the world. ). Fed Chairman Jerome Powell's speech on Friday was the main event. The markets were waiting for the “official” confirmation of monetary easing by the Fed, the ECB and other central banks. Attention focused on a speech by U.S. Federal Reserve chief Jerome Powell for news on whether it will cut interest rates for a second time this year to boost the world's largest economy. But at the same time, he did not specify a time limit. China intends to raise tariffs on US imported goods total $ 75 billion the decision was made in response to the USA. Besides, the import tax on American cars and auto parts will be increased. Trump, of course, reacted extremely nervously to such actions by China, promising to take retaliatory measures. China has a deserved reputation for intellectual property theft. On Friday, Trump estimated China robs the US of “hundreds of billions” a year in ideas. So there is a reason to believe that a very hot and hectic week awaits us. In this light, buying safe-haven assets seems like a good trading idea. But once again we note that the choice of the entry point is extremely important. The upcoming week promises to be calm. Attention should be paid only on the US GDP. Otherwise, the attention will be focused on the confrontation between the USA and China, as well as the Fed. Our trading preferences this week: selling the dollar, finding points for buying gold and the Japanese yen, buying the British pound and selling the Russian ruble. Also, oil sales seem appropriate.
FX:XAUUSDLong
by Trade24Fx
Euro suffers, pound is growing, & dollar waits for PowellPowell speaks in Jackson Hole that is what everybody is waiting for. Fed minutes from the meeting also showed the lack of unity among the Fed members. That might lead to the fact that the rate can be either lowered in September or left unchanged. That is complete uncertainty. That is why Powell's comments are that important. Markets still believe in the rates cut, and afraid to sell the dollar without any existing facts. So Powell’s “pigeon” comments are capable of setting off dollar selling in the foreign exchange market. Therefore we recommend the short dollar. However - if Powell does not give any clear comments, markets may perceive this as the Fed’s unwillingness to cut the rates in September, which could lead to a wave of dollar purchase Statistics on business activity in the Eurozone and the United States came out. As for the data from Europe on the one hand, the Eurozone Composite PMI was better than expected above 50, as was the PMI in the services sector. On the other hand, data from Germany showed a sharp deterioration in the situation, and at the highest pace over the past 6 years: respondents are expecting production to decline in the foreseeable future. The United States also upset. PMI indices came out much worse than expected, and the manufacturing index generally came out below 50, which indicates a reduction in business activity in the United States. The publication of the last ECB meeting minutes showed that Central Bank officials at their meeting on July 25 discussed the benefits of combining two measures to lower interest rates and bond purchases. Recall that the ECB left its policy unchanged last month, but made it clear that it was preparing to reduce its already negative rate and resume buying bonds in September. So, the euro does not look like the best thing to buy. We recall our recommendation to sell the euro against the pound. Moreover, Johnson is stepping up towards agreeing with the EU. Even though Europe in every possible way welcomes his efforts: in particular, Merkel believes that a new deal with Great Britain is possible before the end of October. In general, the Big Seven Conference may be a kind of breakthrough in the stalemate with Brexit. We have strengthened our desire to buy the pound, especially at extremely attractive current prices.
Long
by Trade24Fx
EURUSD: Watch for Rebound at Previous LowAs boring as this week's market is, I think that every good trader should cultivate a high level of patience. Imagine trading within the tight range throughout this week, chasing after every rebound at the range bottom. Either you have spent a great amount of time to make very little profit or you have made losses due to impatience and impulsive trading. It's already the last trading day of the week and the market calmly awaits Powel to deliver his speech. If the market does give a chance and EURUSD retest its previous low, I think it's a fairly good trade to buy the low on the first retest. As long as the Fed doesn't shift away from a near-term rate cut, EURUSD should stand a good chance for a significant rebound after all the accumulation throughout the week.
Long
by AlgoVenture
$CNY: Moving higher$CNY is higher than the initial breakout which caused mass panic among the macro tourists on TV. Instead all eyes are on the hapless Fed Chair who shall be known as the man who crashed equities markets. Equity markets will get spooked regardless whatever Powell decide to do. A hold means money's too tight, a full blown rate cut program means an acknowledgment that fundamentals are in the gutter. Jackson Hole is just another step closer to the end game which the bond markets have been signalling for ages. Wakey wakey for folks still buying equities. Back to the USDCNY, it is a breakout so it is going to go higher. As previously mentioned, the bid ask spread between the US and China in this trade war is too far apart and the FX is an adjustment mechanism to the tariffs especially when the Chinese have been keeping the RMB artificially STRONG .
by WellTrainedMonkey
AUDUSD - Short - Post FED Minutes We currently see AUDUSD dropping further despite not much price action in either direction after the release of the FED meeting minutes. This is because as expected from Powell's Post FED meeting Speech on the 31.07 the minutes indicated there would be no further rate cuts going forward. This coupled with the presumption that the CBA would be forced to cut rates again twice this year due to the weakness of the Australian economy and the US putting 10% tariffs on Chinese goods from December. Therefore we see AUD/USD falling below 0.67 towards the 0.66821 support level.
Short
by KQMarkets
Johnson takes a step forward, Strong dollar and gold - Why ?The growing strength of the United States dollar has already fed up with a lot of things, Trump and American exporters to traders and analysts who have bet and continue to bet on its decline. Quite a long time ago, we have turned to dollars bears and also not enthusiastic about its unwillingness to decline. So it is time to find out the reasons for its strength. According to the dollar’s reaction to the Fed’s rate cut at the last FOMC meeting, it’s not about US interest rates. They are not that high to provoke an influx of speculative capital. “It’s natural for the dollar to be strong,” said Daisaku Ueno, chief currency strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “Trump is waging a trade war against economies that earn a surplus from the U.S. and making the strong American economy even stronger.” On the one hand, investors are scared so they “hide” in US government bonds, which stimulates the dollar demand and strengthens it. On the other hand, Trump's protectionist actions help the US economy, to the detriment of partner countries, which again has a positive effect on the dollar value ( in response to US trade aggression, other countries devalue their currencies which artificially strengthens the dollar). According to the Bigmack Index, the dollar is one of the most overvalued currencies in the world. So we continue to recommend selling the dollar, especially ahead of Powell's Friday speech at the Jackson Hole Symposium. In this light, the legendary investor and Mobius Capital Partners LLP founder. Mark Mobius encouraged all investors to buy gold with any marks. He believes the reduction of interest rates by the Central Banks, making gold an increasingly attractive investment target. It becomes a reliable basis for long-term gold growth. As for our position for gold, it is still unchanged: intraday oscillator trading without obvious preferences, that is, we buy in the oversold area and sell in the overbought one (as a reference, classic RSI oscillators can be used or more advanced versions of oscillators developed our experts for a deeper analysis of price dynamics). And finally, we note the first hints of possible progress in the agreements between the EU and the UK. This is the first public attempt by Boris Johnson to engage the EU in the negotiation process to develop a new version of the agreement on the withdrawal. And although this is only the first uncertain step towards. So we only strengthened our recommendation to buy the pound from current prices.
Long
by Trade24Fx
EURUSD Short Crucial Week FED minutes/ Jackson HoleEURUSD has been dropping since our last analysis on the 12.08 and we are at a crucial stage if we can break the $1.10959 support level we expect further downside. However, this is a very a important stage for the currency pair as FED Minutes on Wednesday and Chairman Powell's comments at Jackson Hole will likely lead to significant volatility and price action. This is particularly the case if the FED changes it's rhetoric on further interest rate cuts in the near term and indicates there will be further rate cuts.
Short
by KQMarkets
Trump and Powell confrontation and current marketsLast week proved quite eventful for financial markets. More than we expected. The Federal Reserve cut its fed funds rate on Wednesday by 25 basis point to a range of 2% to 2.25%. Fed Chairman Jerome Powell said, “It's not the beginning of a long series of rate cuts,”. The current rate cut is a reaction of the Central Bank to an economic slowdown, and its further actions will depend on the state of the economy. The Fed also noted the trade war negative impact on the US economy. Trump shocked the markets in May by hiking tariffs to 25% from 10% on $200 billion in Chinese goods. China immediately retaliated and said a trade deal will not be reached unless the existing duties were stripped. In this light, the safe-haven assets are needed to be bought. As a result, Interactive chart of historical data showing the broad price-adjusted U.S. dollar index published by the Federal Reserve has shown its MAX since 2017. The Banks of Japan and England maintaining the existing structure of the financial system have decided not to change the existing status. A new round of the trade battle between the United States and China. “The U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country,” says Trump in a tweet. China quite naturally replied that it would respond adequately. Nothing foreshadowed trouble. On Monday, American delegates arrived in Shanghai. Although that did not bring any special results, the parties agreed to meet in September already in the United States. That is, it would seem, there is a certain process. And here Trump comes out with his statements. We have a small conspiracy theory about this. Pay attention! The time when Trump announced a new round of trade war is similar to the Fed’s decision the reaction and Powell’s comments as well, which led to a rise in the dollar price. Recall, Trump is extremely dissatisfied with the strong dollar, but, despite all his criticism of the Fed and Powell, the US Central Bank continues to bend its line, ignoring the requirements of the President. What Trump has to do if it is not possible to push through the idea of currency intervention, for now? He has only one tool of indirect influence - trade war. Its escalation will force the Fed to lower the rate further, which in turn will drive to a decline in the dollar value as a reaction to the cycle of depressions. Another important event last week was the publication of statistics on the US labor market. The NFP came out worse than forecasts, but on the whole, the value is sufficiently neutral (although we note that the June’s job report has revised down by more than 30K). Our position on the dollar remains unchanged - we recommend selling it. Escalating trade war increased the likelihood of several Fed rate cuts in 2019. Data on the NFP signal a slowdown in the US economy and Trump makes it unequivocally clear that he intends to “fight” a strong dollar. So the current week we declare a week of dollar sales. Besides, it makes sense to buy safe-haven assets. Remember, sell the Russian ruble and oil.
Long
by Trade24Fx
EURO LONG NOW OR NEVERLooking at the monthly EUR/USD chart the confluences are more so evident. The Stochastic Oscillator showing divergence of the lows. Price currently sitting just below the 61.8% Fib retracement, You can see the ascending channel beginning to form with our 1.3900 handle target being confluent with channel resistance and the D2 Fibonacci extension -61.8% respectively. I want a monthly close on Wednesday after the rate decision above the 6 month EMA and above the 1.1300 handle to confirm the start of the next leg up. This will also couple with a EURO Long summer rally. X MARKS THE SPOT
Long
by zenithmarkets
EURO LONG NOW OR NEVERAs far as risk goes you have to.. for the biscuit. We see Multiple technical confluences surrounding the 1.1170 handle with an X marks the spot scenario. Quarterly chart implies a continuation of the long term up trend for the pair. We are sitting around the 61.8% Fibonacci retracement level and have support from an ascending and descending trendline. With the possible US rate cut later this week we could have the catalyst needed to get the ball rolling. With a 50bp cut the EUR/USD could be sent back above the 1.1300 handle by the monthly close on Wednesday. Speculatively we are looking for the 1.3900 handle being respected at some point in 2020. The 1.1700 handle will be met by the end of the year.
Long
by zenithmarkets
EUR/USD losing momentum ahead of important US reportsThe EUR/USD pair is printing an indecisive candlestick after a bull run last week, signaling that market participants are taking a break to assess latest news from the Fed. The USD consolidation phase may not last long as important US reports are scheduled for tomorrow: US retail sales, core retail sales, and Fed's Powell is delivering a speech. The pair will likely continue to trade sideways until markets get a clearer picture of the future US monetary policy. We're overall neutral/bullish on the pair. The price made consecutive higher highs and higher lows since May, and we've already traded the recent wedge breakout combined with a hidden bullish RSI divergence. Like our analysis? Please support us by hitting the "LIKE" button. Thanks!
by MujkanovicFX
Consequences, oil surplus & dollar in troubleThe previous week provided quite eventful for the financial market. Now, the market expects the Fed to cut the interest rate this month. The probability of such outcome is 100%. So, there is a conundrum, reducing by 0,25% or 0,5 %? After two days of Fed Chairman Jerome Powell's testimony to Congress making the US dollar a weak player as a short dollar. The current downtrend is just a beginning as the US dollar is at extremum point. In addition, as the USA monetary policy has shifted supporting bearish trend. The one and only important data will be Retail Sales Report in the USA, therefore, we sell the dollar. Force majeure events are near term and not supporting the current market conjuncture that has been named as long-term Surplus. International Energy Agency 2Q 2019 the surplus was 900 000 b / d. As we can observe the OPEC + No. 2 did not precipitate the commodity deficit. Since 2011 oil consumer demand growth rate is at its lows, we will sell the oil. Trade war is the reason for all the trouble the economy is facing. China reported a data pact with macroeconomic data: GDP and industrial production growth rate, retail sales indicator. Despite the fact that the outcome is better than expected, GDP growth was 6.2%, which is below the minimum mark of 6.5%, which the Chinese Government put in its long-term development strategy. Earlier, China reported a decline in exports by 7.3%, and Singapore (one of the world's most export-dependent economies) reported a decline in GDP in the second quarter by 3.4% (the maximum decline since 2012). Our trading recommendations for today are as follows. We continue to look for opportunities to sell the dollar in almost all pairs (USDJPY, EURUSD, GBPUSD). Sell the Russian ruble and oil. We continue to sell the oil near the highs and buying from the lows.
FX:USOILShort
by Trade24Fx
Trump PUT carries market to all-time highsCheap, low interest rate money carries us to all time highs (market top april 21, 2021) and then sinks us. Predictions: Trump is reelected in November of 2020 Interest rates are lowered to near zero There is some type of mass credit/lending fraud Tech bubble bursts. Investments in companies with no real path to profitability are abandoned. NASDAQ 100 losses in 2021-2022 outpace S&P 500. Exodus from ETFS. Investment/Asset management industry hit hard as well
AMEX:SPYLong
by awesomo10
1