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Harmonic Patterns

GOLDGold prices are strongly influenced by the interest rate differential and bond yields, particularly real interest rates, which represent nominal yields adjusted for inflation. The key dynamics are: Real Interest Rates and Opportunity Cost: Gold is a non-yielding asset, so its attractiveness depends largely on the opportunity cost of holding it versus interest-bearing assets like government bonds. When real interest rates are high (nominal rates minus inflation), investors prefer interest-bearing assets, putting downward pressure on gold prices. Conversely, low or negative real rates reduce this opportunity cost, making gold more appealing as a store of value and driving prices upward. Nominal Interest Rates and Inflation: High nominal rates combined with low inflation create positive real rates, discouraging gold investment. But when inflation outpaces nominal rates, real rates turn negative, supporting gold demand. This interplay explains why gold often rallies during periods of low or falling interest rates, especially if inflation remains elevated. Central Bank Policies: The U.S. Federal Reserve’s policy decisions heavily impact gold through their influence on interest rates and the U.S. dollar. Rate hikes typically strengthen the dollar and increase yields, pressuring gold prices downward. Rate cuts or pauses often support gold by lowering yields and weakening the dollar. Bond Yields: Rising government bond yields, especially U.S. Treasuries, tend to weigh on gold prices by increasing the return on competing assets. However, if yields rise due to inflation fears or economic uncertainty, gold can still benefit as a hedge. The relationship is nuanced and depends on whether yields rise faster than inflation. Recent Trends and Forecasts (2025): Gold has surged over 25% in 2025, reaching near all-time highs around $3,500 per ounce, supported by expectations of interest rate cuts by central banks like the ECB, ongoing inflation concerns, and geopolitical risks. Despite the Fed maintaining rates at 4.25–4.5%, gold remains resilient due to tariff uncertainties and safe-haven demand. Analysts like Goldman Sachs forecast further gains toward $3,700 or higher by year-end 2025, driven by central bank buying and investor shifts away from traditional assets. Summary Table Factor Impact on Gold Price High Real Interest Rates Negative (gold less attractive) Low or Negative Real Interest Rates Positive (gold more attractive) Fed Rate Hikes Usually negative (higher yields, stronger USD) Fed Rate Cuts or Pauses Usually positive (lower yields, weaker USD) Rising Bond Yields (nominal) Often negative unless inflation fears dominate Inflation Outpacing Yields Positive (gold as inflation hedge) Geopolitical/Economic Uncertainty Positive (safe-haven demand) In essence: Gold’s price movements are inversely correlated with real interest rates and sensitive to bond yield changes. Central bank policies that lower real yields or increase uncertainty tend to boost gold prices, while rising real yields and a stronger dollar typically weigh on gold. The current environment of moderate real rates, inflation concerns, and geopolitical risks supports gold’s strong performance in 2025. What is carry trade in forex ?? A carry trade is a popular forex trading strategy where a trader borrows money in a currency with a low interest rate (the funding currency) and uses it to buy a currency with a higher interest rate (the target currency). The goal is to profit from the difference between the two interest rates, known as the interest rate differential. How It Works: The trader sells or shorts the low-yielding currency and buys or goes long on the high-yielding currency. By holding this position overnight, the trader earns the interest rate differential—essentially collecting interest on the higher-yielding currency while paying less interest on the borrowed currency. For example, borrowing Japanese yen (which historically had very low or negative rates) to buy Australian dollars (which had higher rates) allowed traders to earn the difference in interest rates. Key Points: Profit Sources: Traders can profit from both the interest rate differential and potential appreciation of the higher-yielding currency. Leverage: Carry trades often use high leverage, magnifying gains but also increasing risk. Risks: Exchange rate fluctuations can offset interest gains, and sudden market shifts can force traders to unwind positions, causing volatility. Market Conditions: Carry trades perform best in stable, low-volatility environments where interest rate differentials remain wide and exchange rates do not move sharply against the trader. Example: If the Australian dollar has a 4% interest rate and the Japanese yen has a 1% interest rate, a trader borrowing yen to buy Australian dollars could earn a net 3% interest differential, assuming exchange rates remain stable. In summary: A carry trade is a strategy to earn profits by exploiting differences in interest rates between two currencies, borrowing cheap money to invest in higher-yielding assets, commonly used in forex markets. #gold #dollar#fx
PEPPERSTONE:XAUUSDLong
by Shavyfxhub
GBPJPYGBP/JPY Interest Rate Differential and Bond Yield Overview (May 2025) Interest Rate Differential Bank of England (BoE): Current policy rate around 4.25%, with markets pricing in potential gradual rate cuts later in 2025 but with caution from BoE officials about premature easing. Inflation remains somewhat sticky, and the BoE may keep rates higher for longer, limiting GBP downside. Bank of Japan (BoJ): Policy rate at 0.50%, the highest in 17 years, with a gradual tightening path expected. BoJ remains cautious but signals further hikes as inflation and wage growth support normalization. Japan’s economy contracted by 0.2% QoQ and 0.7% YoY in Q1 2025, but BoJ’s hawkish tilt supports JPY strength. Differential: The interest rate gap favors GBP by roughly 3.75–4.00%, but narrowing as BoJ tightens policy. This differential has historically supported GBP/JPY strength, but recent BoJ hawkishness has limited GBP gains. Bond Yield Dynamics UK 10-Year Gilt Yield: Around 4.44% in April 2025, volatile due to fiscal uncertainties and global bond market swings. Yield movements influenced by BoE’s slow easing and UK’s fiscal outlook. Japanese Government Bond (JGB) 10-Year Yield: Approximately 1.32% as of April 2025, up from previous lows but still low relative to UK yields. BoJ’s cautious policy normalization and reduced bond purchases have pushed yields higher. Yield Spread: The spread between UK Gilts and JGBs remains wide (~3.1%), supporting GBP/JPY’s carry trade appeal but with some compression due to BoJ tightening. Market and Technical Outlook GBP/JPY weakened to around 193.40 recently amid Japan’s Q1 GDP contraction but rebounded near 193.50 as BoE officials warned against aggressive rate cuts. BoJ’s hawkish signals and Japan’s economic contraction have strengthened JPY, creating headwinds for GBP/JPY. Market expectations of BoE’s slower rate cuts and BoJ’s gradual hikes create a complex dynamic, limiting GBP/JPY upside. Divergent monetary policies continue to drive volatility, with the pair sensitive to shifts in BoE and BoJ guidance. Summary Table Factor GBP Impact JPY Impact GBP/JPY Bias BoE Rate (4.25%, cautious) Supports GBP, limits losses – Mildly bullish BoJ Rate (0.50%, tightening) – Strengthens JPY Bearish pressure on GBP/JPY UK 10-Year Gilt Yield (~4.44%) Supports GBP carry – Bullish JGB 10-Year Yield (~1.32%) – Supports JPY yield advantage Bearish pressure Japan Q1 GDP contraction Weakens GBP/JPY Strengthens JPY Bearish Conclusion GBP/JPY is influenced by a still favorable but narrowing interest rate differential, with BoE’s cautious stance on rate cuts supporting GBP, while BoJ’s gradual tightening and Japan’s economic contraction bolster the yen. The bond yield spread remains supportive of GBP/JPY but is compressing. Near term, the pair faces resistance around 193.50, with downside risks if JPY safe-haven demand intensifies or BoE signals faster easing. Traders should watch BoE and BoJ policy updates closely for directional cues.
by Shavyfxhub
USDJPYUSD/JPY Interest Rate Differential and Bond Yield Overview (May 2025) Interest Rate Differential Federal Reserve (Fed): Policy rate steady at 4.25%–4.50% as of May 2025, with expectations of holding rates steady for the near term. Fed’s cautious stance supports a relatively high yield environment in the U.S. Bank of Japan (BoJ): Policy rate raised to 0.50% in January 2025, the highest level in 17 years, marking a departure from ultra-loose monetary policy. Further rate hikes are anticipated every six months, possibly reaching closer to a neutral rate (~2%) by 2027, but BoJ remains dovish compared to the Fed. Differential: The interest rate gap between the U.S. and Japan has narrowed significantly in 2025 due to BoJ hikes and Fed rate hold. Current differential is roughly 3.75–4.00% in favor of the U.S., down from wider gaps in previous years. Bond Yield Dynamics U.S. Treasury Yields: 10-year Treasury yields hover around 4.3%–4.5%, reflecting inflation concerns and fiscal risks. Yields have been volatile but remain elevated, supporting the dollar’s yield advantage. Japanese Government Bonds (JGBs): 10-year JGB yields increased to about 0.5%, reflecting BoJ’s policy shift but still extremely low compared to U.S. yields. BoJ’s gradual reduction in bond purchases and policy normalization supports a stronger yen over time. Impact on USD/JPY Exchange Rate The narrowing interest rate differential reduces the carry trade advantage for USD/JPY, contributing to recent yen strength and USD/JPY declines from 2024 highs near ¥157 to around ¥145–146 in May 2025. Market forecasts vary: some expect USD/JPY to appreciate modestly toward ¥150+ in mid-2025 due to Fed steadiness and geopolitical risk, while others predict further yen gains as BoJ continues tightening and the Fed eventually cuts rates. Safe-haven flows and geopolitical tensions also influence USD/JPY, with the yen sometimes strengthening despite lower yield differentials. Summary Table Factor Impact on USD/JPY Fed policy steady (4.25–4.50%) Supports USD, upward pressure BoJ rate hikes (to 0.5% and rising) Strengthens JPY, downward pressure Narrowing interest rate differential Reduces USD carry trade advantage, yen support U.S. 10-year yields (~4.3–4.5%) Supports USD JGB yields (~0.5%) Supports JPY Geopolitical risk Safe-haven flows can strengthen JPY Conclusion The USD/JPY pair in May 2025 is shaped by a narrowing but still significant interest rate differential, with the Fed maintaining higher rates and the BoJ gradually tightening from ultra-loose policy. This narrowing gap has supported recent yen strength and USD/JPY declines from 2024 highs. However, elevated U.S. Treasury yields and geopolitical risks provide intermittent support to the dollar. The pair is likely to remain volatile, with direction hinging on future Fed-BoJ policy moves and global risk sentiment.
Long
by Shavyfxhub
1
DOLLARThe relationship between the U.S. dollar and U.S. Treasury bond yields in May 2025 reflects a complex and evolving dynamic influenced by fiscal concerns, trade policies, and investor sentiment: Recent Trends: U.S. Treasury yields have risen, with the 30-year yield briefly touching 5%, and the 10-year yield climbing above 4.5%, driven by concerns over rising U.S. debt and fiscal deficits following Moody’s downgrade of the U.S. sovereign credit rating. Despite this rise in yields, the U.S. Dollar Index has weakened, dropping about 4% year-over-year, reflecting reduced confidence in the dollar as the world’s reserve currency. Typical Relationship: Normally, higher Treasury yields attract foreign capital seeking better returns, which supports a stronger dollar. The dollar and bond yields often move in tandem, showing a positive correlation (around 0.5 over recent months). This was evident recently as the dollar strengthened alongside rising yields following a preliminary U.S.-China trade truce. Current Anomalies: However, in early 2025, this relationship weakened significantly. The dollar declined even as Treasury yields rose, signaling a loss of confidence in U.S. assets amid escalating trade tensions and concerns about the sustainability of U.S. fiscal policy. This decoupling suggests investors are reconsidering the dollar’s role and are diversifying away from U.S. assets. Market Sentiment and Risks: The downgrade and rising deficits have increased fears about U.S. fiscal health, prompting some investors to sell U.S. assets, which pressures the dollar despite higher yields. Meanwhile, tariff policies and geopolitical risks contribute to volatility in both yields and the dollar. Outlook: The dollar and Treasury yields have recently realigned, moving more in sync again as trade optimism returned and the Fed maintained a steady policy stance. However, ongoing fiscal challenges and geopolitical uncertainties mean this relationship remains fragile. Summary Aspect Current Observation (May 2025) Treasury Yields Rising (10-year ~4.5%, 30-year ~5%) U.S. Dollar Index Weakened (~4% decline YTD) Typical Correlation Positive (~0.5 correlation between dollar and yields) Recent Anomaly Dollar fell while yields rose (early 2025) Drivers of Anomaly Fiscal concerns, Moody’s downgrade, trade tensions Market Sentiment Reduced confidence in U.S. assets and dollar Outlook Re-alignment underway but fragile due to fiscal risks In essence: While U.S. Treasury yields and the dollar usually move together—higher yields supporting a stronger dollar—recent fiscal concerns and geopolitical tensions have caused periods of divergence. Rising yields amid a weakening dollar reflect investor worries about U.S. debt sustainability and a potential shift away from the dollar’s reserve currency status. However, improving trade relations and Fed communication have recently brought the two back into closer alignment, though the relationship remains sensitive to evolving economic and political development Disclaimer The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. #dollar #dxy #gold
TVC:DXYLong
by Shavyfxhub
1
GOLD The relationship between gold prices and the U.S. Dollar Index (DXY) in May 2025 reflects typical market dynamics influenced by economic data, Federal Reserve policy expectations, and geopolitical factors: The U.S. Dollar Index has shown some recent weakness, trading around 100.36 on May 20, 2025, down about 0.06% from the previous session and roughly 4% lower year-over-year. This decline partly stems from disappointing U.S. economic data and increased market expectations for Federal Reserve rate cuts later in 2025. A weaker dollar generally supports higher gold prices because gold is priced in dollars; when the dollar falls, gold becomes cheaper for holders of other currencies, boosting demand. Conversely, a stronger dollar tends to pressure gold prices downward. However, recent market behavior shows a nuanced picture: the dollar’s recent modest gains against the yen and euro have coincided with fluctuating gold prices, influenced by safe-haven demand amid geopolitical tensions and inflation expectations. The dollar’s performance is influenced by factors such as U.S. Treasury yields, inflation expectations, and trade policy developments. For example, falling Treasury yields and dovish Fed signals have softened the dollar, which can be supportive of gold. Overall, the inverse correlation between gold and the dollar remains strong, but gold’s price movements also depend on inflation trends, real interest rates, and geopolitical risk premiums, which can sometimes decouple gold from dollar moves in the short term. Summary: Dollar Index (DXY): Around 100.36 on May 20, 2025, slightly down recently but expected to rise moderately by year-end. Gold Price Impact: A weaker dollar supports gold by making it cheaper internationally; a stronger dollar tends to weigh on gold. Market Drivers: Fed rate cut expectations, Treasury yields, inflation data, and geopolitical tensions influence both gold and the dollar. This dynamic means monitoring U.S. economic data and Fed policy announcements is crucial for anticipating near-term moves in both gold and the dollar index.
FUSIONMARKETS:XAUUSDLong
by Shavyfxhub
USOILUSOIL (WTI Crude) Fundamentals – May 2025 1. Supply and Demand Dynamics Global Oil Demand: The International Energy Agency (IEA) projects global oil demand growth will slow from 990,000 barrels per day (bpd) in Q1 to around 650,000 bpd for the rest of 2025, reflecting economic headwinds and record-high efficiency gains. The IEA’s latest report (May 2025) estimates total demand will rise by 741,000 bpd in 2025, reaching 103.9 million bpd, with emerging markets (China, India, Africa, Latin America, Middle East) driving most of the growth. OECD demand is expected to decline, while non-OECD demand remains geographically diversified. Global Oil Supply: Global crude oil and liquids supply is forecast to average 104.4 million bpd in 2025, up 1.8 million bpd (+1.7%) from 2024. Non-OPEC+ countries (U.S., Brazil, Guyana, Canada) are expected to contribute most of the supply growth, potentially resulting in a supply surplus. OPEC+ extended its 3.7 million bpd supply cuts to the end of 2026, but voluntary cuts will be gradually phased out starting April 2025. Supply-Demand Balance: The EIA expects a supply surplus in 2025 as non-OPEC+ supply growth outpaces demand increases, especially with OPEC+ phasing out some cuts. 2. Inventory and Refinery Data U.S. Inventories: U.S. commercial crude oil inventories fell by 2.7 million barrels at the end of April, now about 6% below the five-year seasonal average. Gasoline and distillate inventories remain below average, suggesting tightness in refined product markets. U.S. refineries are operating at 88.6% capacity, with robust input and flat-to-lower gasoline production. 3. Geopolitical and Macro Factors Trade Policy and Geopolitics: Recent easing of U.S.-China trade tensions and progress in U.S.-Iran nuclear talks have improved risk sentiment and supported oil prices. Hopes for a Russia-Ukraine ceasefire and de-escalation in the Middle East have reduced risk premiums, but the market remains sensitive to any setback in negotiations. OPEC+ Compliance: OPEC+ compliance with production cuts was high (112%) in March 2025, tightening supply and helping prices rebound from recent lows. 4. Price Trends and Outlook Current Prices: WTI crude is trading around $62.80–$63.50, rebounding from recent lows but still well below early 2025 peaks. Price volatility remains high (Brent’s 30-day realized volatility peaked at 35%), reflecting sensitivity to geopolitical headlines and inventory data. Forecasts: J.P. Morgan maintains a Brent forecast of $66/bbl for 2025, with expectations for prices to remain under pressure due to supply surplus, but potential for mid-$70s if trade optimism and OPEC+ discipline persist. Futures markets price WTI at an average of $75/bbl for 2025, though this is above current spot prices. Summary Table Factor Current Status/Impact (May 2025) Global Demand Growth Slowing, driven by emerging markets Global Supply Rising, led by non-OPEC+ (US, Brazil, Guyana) OPEC+ Policy Extended cuts, gradual phase-out US Inventories Below 5-year average, supporting prices Geopolitical Risk Lower, but market remains headline-sensitive WTI Price Range $62.80–$63.50 (recent), futures avg $75/bbl Volatility High, driven by macro and geopolitical uncertainty Conclusion USOIL fundamentals for May 2025 reflect a market balancing slower demand growth, robust non-OPEC+ supply, and cautious optimism on geopolitics. Ongoing OPEC+ discipline and below-average inventories provide some support, but the risk of a supply surplus and persistent volatility keep prices capped. Watch for trade policy shifts, OPEC+ compliance, and inventory trends as key catalysts for the month.
TVC:USOILShort
by Shavyfxhub
Xrp - Prepare for at least a +50% move!Xrp - CRYPTO:XRPUSD - will head much higher: (click chart above to see the in depth analysis👆🏻) Xrp has perfectly been respecting market structure lately and despite the significant volatility, the overall crypto market remains bullish. Especially Xrp is about to perform a bullish break and retest, which - if confirmed by bullish confirmation - could lead to a rally of about +50%. Levels to watch: $3.0 Keep your long term vision! Philip (BasicTrading)
CRYPTO:XRPUSDLong
by SwingTraderPhilTV
13
GBPAUDGBP/AUD Interest Rate Differential and Directional Bias (May–June 2025) Interest Rate Differential Bank of England (BoE): Policy rate: 4.25% (cut from 4.5% in May 2025). Outlook: Further cuts likely, but pace depends on inflation (currently 2.6% YoY) and growth (Q1 GDP: 0.6% QoQ). Markets expect 1–2 more cuts in 2025, potentially lowering rates to 4.0% by year-end. Reserve Bank of Australia (RBA): Policy rate: 3.85% (cut by 25 bps on May 20, 2025). Outlook: Two additional cuts expected in 2025 (to 3.35%) due to subdued core inflation (2.9% in Q1) and global trade risks. Differential: +0.40% in favor of GBP, narrowing as RBA cuts outpace BoE easing. Key Economic Data and Drivers United Kingdom GDP Growth: Q1 2025 growth outperformed expectations at 0.6% QoQ, though manufacturing and industrial production lagged. Inflation: March CPI fell to 2.6%, but energy-driven price pressures may push it to 3.5% in Q3 2025. Australia Employment: April jobs data showed 20.9K jobs added (vs. 32.2K expected), with unemployment steady at 4.1%. Trade Risks: U.S.-China tariff ceasefire reduces immediate pressure, but export reliance on China leaves AUD vulnerable. Directional Bias Short-Term (Days–Weeks): Bearish GBPAUD RBA Aggression: Immediate post-cut AUD weakness expected, but faster RBA easing vs. BoE could narrow the rate gap. Growth Divergence: UK’s stronger GDP vs. Australia’s reliance on China may support GBP. Long-Term (6+ Months): Bullish GBPAUD Rate Differential Stability: BoE’s slower cuts vs. RBA’s aggressive easing may widen the gap, favoring GBP. Commodity Risks: AUD remains exposed to China’s economic slowdown and iron ore price volatility. Summary Table Time Frame Bias Key Drivers Technical Levels Short-Term Bearish RBA cuts, technical breakdown 2.0565 (S), 2.0732 (R) Medium-Term Neutral/Bullish UK growth resilience, channel support 2.0490–2.0720 (Channel) Long-Term Bullish Diverging central bank policies, AUD risks 2.1000+ (Target) Critical Factors to Monitor BoE Communications: Signals on future cuts (next meeting: June 19, 2025). RBA Policy: Additional cuts in 2025 (next decision: June 3). UK Inflation (May 29): Core PCE data critical for BoE’s path. Conclusion: GBP/AUD faces near-term bearish pressure from RBA cuts and technical breakdowns, but medium-to-long-term trends favor GBP due to slower BoE easing and UK growth resilience. Watch for shifts in central bank rhetoric and key technical levels for directional confirmation.
by Shavyfxhub
USDJPYUSD/JPY Interest Rate Differential and Upcoming Economic Data (May–June 2025) Interest Rate Differential Federal Reserve (Fed): Policy rate: 4.25%–4.50% (held steady in May 2025). Outlook: Cautious stance amid mixed economic signals; markets expect no cuts until July 2025 unless inflation reaccelerates. Bank of Japan (BoJ): Policy rate: 0.50% (unchanged in May 2025, highest since 2008). Outlook: Dovish despite trimming growth and inflation forecasts; further hikes unlikely until 2026 due to U.S. tariff risks and weak GDP (-0.7% annualized in Q1). Differential: ~3.75–4.00% in favor of USD, sustaining a strong yield advantage for the dollar. Upcoming Economic Data and Events United States May 29: GDP Growth Rate QoQ (2nd estimate): Expected to confirm 2.4% QoQ growth, rebounding from Q1 contraction. Core PCE Prices QoQ (2nd estimate): Forecast to ease to 2.6% (from 3.5% in Q1), critical for Fed’s inflation assessment. May 30: Core PCE Price Index MoM/YoY: Key Fed inflation gauge; YoY expected at 2.6% (above 2% target). Fed Communications: FOMC Minutes (May 27) and speeches by Powell, Barkin, and Williams to clarify policy trajectory. Japan BoJ Policy Signals: Focus on U.S. tariff negotiations (24% on Japanese exports) and their impact on growth. Revised 2025 GDP growth to 0.5% (from 1.0%) and core inflation to 2.2% (from 2.7%) . Trade Data: Export performance under U.S. tariffs (autos, machinery) to influence JPY sentiment. Directional Bias for USD/JPY Short-Term (May–June): Bullish USD/JPY Fed’s steady rates vs. BoJ’s dovish hold sustains yield advantage. U.S. economic resilience (rebounding GDP, strong labor market) contrasts with Japan’s contraction. U.S. Tariff Escalation: Could dampen global growth, boosting safe-haven JPY. BoJ Surprise Hike: Unlikely but not impossible if inflation overshoots. Fed Dovish Shift: If U.S. data weakens, rate cut bets may pressure USD. Summary Table Factor USD Impact JPY Impact USD/JPY Bias Fed Rate Hold Strengthens USD – Bullish BoJ Dovish Stance – Weakens JPY Bullish U.S. GDP Rebound Supports USD – Bullish Japan’s GDP Contraction – Pressures JPY Bullish Conclusion: USD/JPY retains a bullish bias in the near term, driven by the Fed’s yield advantage and Japan’s economic fragility. However, escalating U.S. tariffs and safe-haven JPY demand could cap gains. Monitor U.S. inflation data (Core PCE) and BoJ rhetoric for shifts in momentum.
Long
by Shavyfxhub
2
BITCOINBITCOIN could be seeing smart money after it returns to buying character floor and as long as price remains on that 3hr/4hr demand floor it crossed since 2024 and retested it,we will keep buy sentiment and hoping that 118-119k supply roof will be attended. On a flip side ,a break below that 3hr/4hr demand floor will visit 70k zone where we have a buy traps which the last touch was a double bottom and a bullish price action .break or swipe of the zone will be 50 k zone . on weekly we have descending trendline break out which am expecting a retest on that zone. #bitcoin #btc #crypto#analysis
Long
by Shavyfxhub