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A traders' week ahead playbook - Jackson Hole in the mix The event risk this week is really centred on Jay Powell’s speech at the Jackson Hole forum (Sat 00:00AEST), with other global data points unlikely to promote as much of a reaction – Powell should keep the option of a 75bp hike at the 21 Sept FOMC meeting firmly on the table, but offer the flexibility to go 50bp if we do see sufficient softening in the labour market in the US payrolls (NFP) report (2 Sept) and the pace of headline CPI inflation (13 Sept) falls again in the August read. The prospect of acknowledging future makers that could lead to the Fed cutting rates will not be present – the market would be highly surprised if they did hear this. As it stands, the market prices 61bp of hikes from the Fed in the Sept FOMC meeting, therefore leaning closer to a 50bp hike – it would not surprise to see this pricing between 60-65bp by the end of the coming week - Powell will want to give the Fed maximum flexibility and optionality until they know the NFP and CPI prints. For this week, it's likely less about the known event risks and keeping it thematic - reacting to flows from a targeted group of markets. 5 key markets that could influence cross-asset volatility this week: • The USD – notably USDCNH • EU Nat Gas & German Electricity prices • US 5 & 10-year real rates (for those on TradingView use the code - TVC:US05Y-FRED:T5YIE) • US volatility index – the VIX index • Fed balance sheet - A renewed belief that QT will ramp up Specifically, EU Nat Gas (NG) prices are front of mind – EUR and EU equity index traders should watch this closely – on Friday we saw the NG price trade to EUR262.78 – a new high in this bull trend and continues to home in on EUR300. We see German ‘baseload’ electricity prices moving exponentially and again the further this rises, the worse economics in Europe will be into the next few months. News that Gazprom is to close the Nord Stream pipeline between 31 Aug and 2 Sept for maintenance has traders worried that the shutdown may be extended and is a EUR negative. Germany has done a decent job of stockpiling gas for the winter, but the market is nervous. Fed balance sheet dynamics We also watch the Fed’s balance sheet dynamic – like many I have been focused on excess reserves passed to the Fed from US commercial banks – reserves have been on the rise, and by more than the Fed has been reducing its assets via QT - this better liquidity backdrop has been well correlated with risky assets. All the focus is on the Fed ready to ramp up the pace of reduction in the US Treasuries and potentially mortgages it holds on the asset side of the balance sheet – there is little doubt that these dynamics are boosting the USD. And what a week I was for the USD – EU NG, Fed liquidity dynamics aside, a 1.4% move higher in USDCNH above 6.8300, all contributing in boosting the USD – with the PBoC likely cutting the 1- & 5-year Prime rate (11:15 AEST) by 10bp a piece, we watch USDCNH – while a cut is priced, an upside break of 6.85 would impact broad markets and should be on the radar. High beta FX was carted out last week, with USDZAR and NZDUSD leading the charge. AUDUSD gets prime time on the radar, and while 1-week implied volatility is not overly punchy (at 11.75%) and pricing the downside on the week into 0.6870 - the technicals are looking weak, with Friday close just holding the 5 August swing. USDJPY has been a crowd favourite too, and it feels like this could squeeze into 138.00/20 before I have a greater conviction on fading the move. EURUSD sits on the 61.8% fibo of the July-Aug rally and parity is a whisker away – a fresh push higher in EU NG takes EURUSD through parity, and impacts the GER40, with funds further shying away from EU exposure. We do get some data points in Europe to focus on – such as S&P global manufacturing PMI (Tue 18:00 AEST) and consumer confidence (Wed 00:00 AEST), but the EUR should take its cue from energy. GBPUSD looks weak and the obvious level is the 14 July low of 1.1760 – rates markets price 56bp of further hikes from the BoE in the 15 Sept BoE meeting, and this week's data (again we see S&P global manufacturing PMI) may see traders’ massage that pricing. UK growth rates weigh on the GBP, and the market feels the UK may have crossed the Rubicon, to the point where high inflation becomes less supportive of a currency and impacts growth through the feedback loop to social channels. If the USD is to find further form – driven by the US exceptionalism story, rising 2yr Treasuries and reduced liquidity from the Fed’s balance sheet, then other risky assets should head lower this coming week. BBBY aside, the risk ‘canary in the coalmine’ plays are looking vulnerable – ARKK, crypto, SPAC and IPO index, to names a few. Implied vol is still sanguine, with our US volatility index making a move into 24.3% on Friday but not at levels indicative of greater S&P500 hedging demand. With options expiry now passed, we can watch (and/or trade) this index but the higher this goes the greater the opportunity to trade from the short side, as liquidity comes out of the market, the buyers stand aside, and cross-market correlations rise. The momentum is to the downside in US500 and NAS100, although I am still waiting on a bearish MA crossover (3EMA < 8 EMA). A break of 4203 would put 4065 on the table. With so many turning bearish, a renewed push into 4340 would be the pian trade. I favour the downside tactically, but as always holding an open mind.
PEPPERSTONE:US500Short
by Pepperstone
GBPNZD-- Final position taken; 3 of 4 ideas currently activeHey guys, I recently entered into 2 long term trading positions on GBPNZD. And, as I usually do, I took a couple scalping positions as I monitored the market waiting for those two positions to initiate. You can find the other publishings down below in the related ideas section. Also, this is a scalp trade in my opinion, which I discussed my thoughts on these types of positions on one of those other publishings i just mentioned, so be sure to check that out if it sounds interesting to you. Like, comment, and subscribe to the channel for more content on foreign exchange, United States economics, and bitcoin trading ideas. As always, happy trading, and good luck!
by Bobbyusesfib
GBPNZD-- Skillset demo on 1H TF scalp trade (6:1 RR)I do not typically entertain intricate/unreliable unit analysis using small timeframes. This is simply because "The closer you look, the less predictable the behavior becomes". I will not be referring to the much more imperative timeframe analysis' (1W, 1M, etc.) that I have drawn up (and partly visible) regarding the GBPNZD on this posting, not sorry. Nevertheless, I do feel compelled to demonstrate that it is possible for market participants to identify and react to small timeframe price action and produce a net gain.. Even if the risk is taken using a data set analysis done on what has been proven an extremely unreliable keynote of units; those being the 1H & smaller timeframes. How, you ask? Well, first lets just be completely clear: In my experiences, price closes should not be considered or reacted to on any units if they are smaller than a 4H unit. A trade made on a small timeframe is called a "scalp", and though many people may disagree with me here, I am calling this trade idea on the 1H timeframe a "scalp" trade.. The first thing we should notice when looking at the chart shown above is the strong reaction to the price area of 1.878 (+/-), & a clean impulse, followed by the consolidation of price movement-- this is where we are currently trading. Although many traders prefer to utilize swing levels (lol) when drawing Fibonacci retracements, I have found my success in the markets as well as confluence with other types of indicators and comparable analysis' when I retrace "clean impulses", or 3+ green or red candles in a row (Plus, the candles on either side of the clean impulse), as opposed to retracing full swings. A clear example of this approach is well demonstrated on this publishing. Please let me know in the comments if you would like more information on how I use Fibonacci theory to find success in extracting value from a market. One of the many first principles I always apply when scalp trading is "the target is the pullback", which is what I am confident is taking place on GBPNZD as I write this. Although there is PLENTY of potential for price to hit levels lower than the .618 retracement level, the reduction of risk and security of net gain takes place then (immediately), which is much earlier and more conservative than if I was taking a risk while applying a higher unit analysis and data set. This is how you can net gain in such unpredictable data sets. After all, it is the target... Happy trading, and good luck!
by Bobbyusesfib
2
USD DXY-- 2H analysis for August 15th to 19th '22 (3:1 & 9:1)Here is a short-term analysis on what we can expect from the United States Dollar Index for the third (of four) full trading weeks in August, 2022. Looking for net pushes IN-trend (higher timeframes!) on pairs like EURUSD, GBPUSD, and major US stock indices. A retest toward the most recent high's of the index should be anticipated (at minimum) over the next week or two.. Until the index can close below 105.0 on a 24H candle, I am confident using this publishing as reference when it comes to participating in the markets this week. Bullish on USD for the next 2 weeks (fed rates rising long term = short on XXXUSD pairs) Please like and subscribe for more content on foreign exchange markets, US economic markers and perspectives on bitcoin. Proper risk management is key, as always.. Happy trading, and good luck!
TVC:DXY
by Bobbyusesfib
So, I looked at the CNY (Chinese Yuan or Juan) more, and..Check out my most recent publishing(s) referring to this particular exchange rate in the "Related Ideas" section below if your interested in the USDCNY. I took a closer look at my in-depth analysis over the weekend and felt as though it needed some adjustments (additions*) + further complication.. but its for the better.. hear me out. Ive been spending the last month or so, and will be spending as much time as necessary to catch up and become more and more familiar with what's appearing to become an even more disastrous real estate market than what we know to be the worst recorded event (in relativity) in capitalism history. ("the 2008 financial crisis") This event could be worse, simply due to the fact that China is so powerful.. (which is good for us; the money managers!) As a trader, its important to consider the recent upturn regarding political and socioeconomic gossip. IYKYK There is plenty of public and freely available information on how to approach any market using fundamental risk management. Save this, be patient, and ask questions. Happy trading, and good luck!
by Bobbyusesfib
Intraday Analyzation of DXY (July '22 Pre-Monthly Close)like, comment, and subscribe! It was an interesting and exciting day to say the least when reviewing the market reaction today, after the feds released critical monetary policy information regarding the global standard. With the federal funding rates remaining unchanged, and an interest rate increase that was not as alarming as rumored to be, the DXY made retreat and is currently printing in the same territory of last weeks previous low marks.. There was a lot of speculation and rumors leading up to todays federal announcements that there could have been a 100 bps (or 1%) increase in the federal interest rate, which is a rate the United States government hasn't issued since the early 1980's. (Ironically, that time was the country's worst inflation event in history.) The rate hike was announced in the ladder half of the trading day at 75 bps (or .75%), which, lets just say, for the sake of this article, was nothing to call your brokerage firm about. Despite sellers taking control of price action in the midst of these "red folder" announcements to close the day, there are still a couple of bright sides for traders who, like myself, who are looking for a continuation of bullish price action, whether it be sooner or later. There is more critical information regarding the currency being announced tomorrow, July 28th. This news will also cause more volatile movement in the market. Fingers crossed that the index can remain above the marked area of support as we approach the monthly candle close. It shouldn't be a surprise if it takes some time for the market to decide its feelings about the newly released, and upcoming fed announcements. Even though there is a good possibility for a short term consolidation period, and some volatility as the week finishes, there is still plenty of opportunity for traders to extract value. Happy trading, and good luck!
TVC:DXY
by Bobbyusesfib
Next short position on XAUUSDUnfortunately I missed the short trade after the entry annotated at the top because that green candle wick was my SL and due to holiday festivities I was not monitoring the charts to re-enter. However, this is my next position. Based on support and resistance confluences on the daily AND weekly charts, this is where I believe price will drop to. However, to avoid drawdown I have placed a sell stop and a sell limit based on two alternate entries with the same SL and TP as the position tool shows.
TVC:GOLDShort
by ewilliams1997268765
5
Gold is WeakGold is repeating patterns since 2020 especially August 2020 to March 2021 - ping-ponging within descending channels with bear flags, tops in oversold RSI followed by negative SMA crosses, bearish divergences, and MACD bearish crosses and weak pullbacks that can't get past the 0 level and ending with another bearish cross. There is no bullish divergence that might suggest it not going below 1700 like in November 2021. Be careful with fake-outs and retests like that bear flag in Oct - Nov 2020. Those are stop loss hunts, liquidity grabs or whatever you wanna call them.
TVC:GOLDShort
by Indotermes
XAUUSD Consolidation ZoneAs you see in the 4H chart, price is moving in a consolidation area between the support and resistance levels (1828-1870). Price has touched the resistance area in a big upside move only in one candle which shows there was an upside pressure and bulls were trying to keep price high, but they failed to break the resistance and pushed to the downside. Currently, price is moving downside towards the yellow support level, and since the main trend is bearish, we can expect a downside breakout on the support level and a drop towards the last major low. As long as price is in the consolidation area, we should wait for the breakout first, then enter the position in the same direction of the breakout.
FX:XAUUSD
by Mahtab_Tradia
6
USOil Daily - Bullish move ending soon?TRADE PLAN 9 June 2022 USOIL (CFD on WTI Crude Oil) Description Although bullish trend remain active for now, price momentum in favour of bullish move is diminishing. Nevertheless, Price has a high probability to visit 133.20 level at Weekly R3. At 133.20 price will have completed a 5-wave sequence on Daily Chart. Hence providing a high probability set up to bearish move back to 97.65 price level. Disclaimer Charts are educational, not investment recommendation
TVC:USOILLong
by edgeAZFX
XAUUSD Bearish StructureAs you see in the 4H chart, there was a bullish rally towards the red resistance zone and an upside breakout on it which was failed and price could not get fixed above it, so it came all the way down again. Currently, we can see a bearish structure with a lower low which indicates price is willing to drop and reach lower levels. Since price has broken the last minor low, I expect it may see 1830 and in the case of a downside breakout and bearish candle closure below 1830, the next target would be around 1811 which is the next support level. What is your outlook on XAUUSD? Feel free to share your ideas in the comments.
FX:XAUUSDShort
by Mahtab_Tradia
7