The chart above explains.
When trading, I need to update myself daily on what is happening that might affect market outlook. There is a need to be flexible and NOT maintain a STATIC mindset.
Now I am changing my trading direction yet again. Why? Because the bond yield says so. And I need to follow what the market wants. The trick lies in the ability to INTERPRET all these subtle message that is being received.
On 12/07, we will know the Core/CPI for June 2023. While PPI is showing sign of downtrend and PPI leads CPI, perhaps that may not be enough. With recent GDP upgrade and also a sticky core PCE, market may still be undecided. There is no sign of recession yet. And as we know, now the market FULLY expect another 25bps at the next FOMC. With this, bond yield is expected to RISE. And as I said previously, when this happen, EURUSD will likely rise as well. This is all MATHEMATICS and ECONOMICS. Only fools believe in INDICATORS.
And yet again, I can see the trusty 'D" showing the sign and leading the way.
I had already TP on my previous SELL trade. Now I am BUYING.
Good luck.
P/S : Do not just believe what I say. Use your common sense.
When trading, I need to update myself daily on what is happening that might affect market outlook. There is a need to be flexible and NOT maintain a STATIC mindset.
Now I am changing my trading direction yet again. Why? Because the bond yield says so. And I need to follow what the market wants. The trick lies in the ability to INTERPRET all these subtle message that is being received.
On 12/07, we will know the Core/CPI for June 2023. While PPI is showing sign of downtrend and PPI leads CPI, perhaps that may not be enough. With recent GDP upgrade and also a sticky core PCE, market may still be undecided. There is no sign of recession yet. And as we know, now the market FULLY expect another 25bps at the next FOMC. With this, bond yield is expected to RISE. And as I said previously, when this happen, EURUSD will likely rise as well. This is all MATHEMATICS and ECONOMICS. Only fools believe in INDICATORS.
And yet again, I can see the trusty 'D" showing the sign and leading the way.
I had already TP on my previous SELL trade. Now I am BUYING.
Good luck.
P/S : Do not just believe what I say. Use your common sense.
Comment:
The usual belief is that Dollar moves together with yield. But now, we are seeing yield rising but it seems that dollar is not - EURUSD is staying above 1.0900.
With US10Y above 3.75%, it would be VERY HARD for EURUSD to fall. Most likely, we would be seeing it rising to possible 1.1100
Why not we see if this is true :) And if this is true, why not we guess what might happen to EURUSD once the Fed cuts - should be interesting indeed.
Good luck.
With US10Y above 3.75%, it would be VERY HARD for EURUSD to fall. Most likely, we would be seeing it rising to possible 1.1100
Why not we see if this is true :) And if this is true, why not we guess what might happen to EURUSD once the Fed cuts - should be interesting indeed.
Good luck.
Comment:
Many would be guessing, should I BUY or SELL. Will it go UP or DOWN. Then they start drawing lines in the chart, add more indicators and consult gurus. Recents news had also made them excited. Manufacturing PMI is down - pointing to contraction. Surely the Fed would cut soon. Some would also think - the Fed had PAUSED, the next thing they gonna do is CUT. When that happen, dollar will FALL.
Is that so???
The critical as well as the most difficult thing to do is actually understand DIRECTION. It is a 50-50 thingy but yet 80%++ fails miserably. To understand direction is also to understand the WHY. You know WHERE and WHEN to execute your trade but where to look for WHY.
All economic indicators would manifest itself in BOND YIELD. If we understand it, then we can roughly tell how FX would react.
You should be looking at US10Y. It is now sitting comfortably above 200MA. When it went briefly below, 100MA immediately step in. Now if yield is HIGH, where would EURUSD turns to? If I am looking for a SELL, what must happen to yield FIRST?
Good luck.
Is that so???
The critical as well as the most difficult thing to do is actually understand DIRECTION. It is a 50-50 thingy but yet 80%++ fails miserably. To understand direction is also to understand the WHY. You know WHERE and WHEN to execute your trade but where to look for WHY.
All economic indicators would manifest itself in BOND YIELD. If we understand it, then we can roughly tell how FX would react.
You should be looking at US10Y. It is now sitting comfortably above 200MA. When it went briefly below, 100MA immediately step in. Now if yield is HIGH, where would EURUSD turns to? If I am looking for a SELL, what must happen to yield FIRST?
Good luck.
Comment:
The FX market is very confused. Not knowing where to go. The Fed had forecast a 'mild' recession coming but yet is determined to raise rates. wtf about pivot???
But one market is very clear eyed - the bond market. Bond yield move in only one direction - UP.
FX is now very volatile. A lot will get 'burned' unless they know what they are doing - mostly don't. This is why understanding the WHY is important - trading direction!!!
As I said, EURUSD will find it to be VERY DIFFICULT to FALL.
Between now and the next FOMC, FX will do what bond yield does - albeit reluctantly. And market consensus is a 25bps hike.
What comes after denial is anger. I think many traders are, especially when they are losing money. Some will try to limit their loses by doubling down, thinking the price will not go any further - it is impossible, they say. It is already so HIGH/LOW. But yet again, price will always do the 'impossible' leading to acceptance. Another trader falling into the 80%++ category who loses money. How depressing. But not to worry for they will be many more new traders coming in to try their luck.
Good luck everyone :)
But one market is very clear eyed - the bond market. Bond yield move in only one direction - UP.
FX is now very volatile. A lot will get 'burned' unless they know what they are doing - mostly don't. This is why understanding the WHY is important - trading direction!!!
As I said, EURUSD will find it to be VERY DIFFICULT to FALL.
Between now and the next FOMC, FX will do what bond yield does - albeit reluctantly. And market consensus is a 25bps hike.
What comes after denial is anger. I think many traders are, especially when they are losing money. Some will try to limit their loses by doubling down, thinking the price will not go any further - it is impossible, they say. It is already so HIGH/LOW. But yet again, price will always do the 'impossible' leading to acceptance. Another trader falling into the 80%++ category who loses money. How depressing. But not to worry for they will be many more new traders coming in to try their luck.
Good luck everyone :)
Comment:
So now you believe me? Not really going by 5 boost.
One more free information for you - the market now looks to US02Y. Once it moves above the EFFR, expect a great firework display. And once above 5.2% - Oh là là
Have a nice weekend.
One more free information for you - the market now looks to US02Y. Once it moves above the EFFR, expect a great firework display. And once above 5.2% - Oh là là
Have a nice weekend.
Comment:
Looking at the bond yield itself can let us know the FX direction.
The 10s and the 02s move in sync. Sometimes, one moves faster than the other, causing what we know as an inversion.
If we look at its movement in the last 3 trading sessions, we can see that the 10s are moving confidently while the 02s hesitate. That was simply because it reached a certain inflection point. Come next Monday, when it does not hesitate anymore and both the 10s and 02s move in unison, we can expect stronger movement in EURUSD. I am sure by now we know in which direction.
Good luck.
The 10s and the 02s move in sync. Sometimes, one moves faster than the other, causing what we know as an inversion.
If we look at its movement in the last 3 trading sessions, we can see that the 10s are moving confidently while the 02s hesitate. That was simply because it reached a certain inflection point. Come next Monday, when it does not hesitate anymore and both the 10s and 02s move in unison, we can expect stronger movement in EURUSD. I am sure by now we know in which direction.
Good luck.
Comment:
Be careful.
Dollar BULL seems to be arriving a bit earlier than expected. If my formula is right, we will be seeing the RISE of USD to a level not seen before.
Good luck.
Dollar BULL seems to be arriving a bit earlier than expected. If my formula is right, we will be seeing the RISE of USD to a level not seen before.
Good luck.
Trade closed: target reached:
It is now time to prepare for a SELL.
Good luck.
Good luck.
VERY often, we read news like this from some 'smart knowledgeable' people. So what our OCBC friend is suggesting is that rates have little more to rise before Fed eases. And if rates can't go up much, so USD would also not go UP much. And once the Fed eases, the USD might DROP.
But I am definitely having the opposite view. I think once the easing cycle comes with the Fed cutting EFFR, USD would RISE. The rationale is in the previous idea. The reason I know this is because I know WHY/WHEN EURUSD pivoted back in 09/2022 even as EFFR continue its rise.
So, you guys be careful every time you see something in the MSM.
Good luck.