Analyst Articles – Forex News 24 |
- Fresh Highs Ahead FOMC, What’s Next?
- Crude Oil Price Chart Outlook Anchored to Technical Confluence
- Gold Prices May Suffer if FOMC Undermines Dovish Expectations
- US Dollar Seems to be Biased Upward on FOMC Rate Decision
| Fresh Highs Ahead FOMC, What’s Next? Posted: 28 Jul 2019 02:07 AM PDT Hits: 5 US Dollar Technical Forecast Talking Points:
Technical Forecast for the US Dollar: NeutralHere Comes the FOMCThe stage is set and at this point, it would probably be a far larger disappointment if the FOMC did not cut rates next week. This has been a pensive theme now for eight months and the last rate hike out of the bank in December all-of-the-sudden doesn't look like such a great idea. The Federal Reserve remained hawkish through last year, even in the face of falling equity prices in Q4 in the effort of 'normalizing' interest rates. This comes after a series of emergency rate cuts in 2008 and a few different rounds of QE along the way. Janet Yellen started hiking in December of 2015 and another rate hike followed a year later. But, in calendar years of 2017 and 2018 the Fed hiked a full seven times. Coming into 2019, it looked like that plan for further rate hikes was very much on the table. At that December rate hike last year the bank said that they were looking to boost rates another two times in 2019. Market participants didn't like that one bit, and stock prices continued their descent through the holidays. But Q1 was marked by a number of hints from the Fed that rates would not continue to rise and, perhaps even start to fall. This was echoed at the March rate decision when the bank cut expectations for hikes this year to zero; and finally in the month of June the Fed began to forecast a cut in 2019. At this stage – the big question is just how dovish might the Fed be, and this has taken a recent hold of near-term price action as this scenario is in the spotlight. Last week saw a great illustration of that fact when some off-hand comments from NY Fed President John Williams were inferred to mean that the bank was looking to take aggressive action. This brought a quick gust of weakness into the Greenback as gold prices flexed all the way up to 1450. This was soon walked back by the New York Fed, and in response the US Dollar started to gain and quickly faded-out that prior move of weakness. That theme has continued into this week, pushing USD price action to fresh seven-week-highs and making a fast approach at the 98.33 double top from Q2. US Dollar Two-Hour Price ChartChart prepared by James Stanley At this stage, chasing the Greenback can be a challenge, particularly considering the fact that this rally is taking place ahead of a widely-expected rate cut. The early portion of this week showed near-parabolic like price action in the USD, and this continued through a couple of key areas of resistance at both 97.70 and 97.86. There's an additional level of interest on the chart at 98.33, which is a double top formation that built in through Q2 trade. If prices move up here and begin to show resistance, the door can quickly open for short-side swing potential. Conversely, if this level does not impede the advance, then bullish breakout potential remains and targets can be directed up to the 98.50 level on the chart that hasn't been in-play since May of 2017. US Dollar Daily Price Chart
Chart prepared by James Stanley US Dollar Technical Forecast for Next Week: NeutralFor next week the technical forecast will be set to neutral on the US Dollar. While this week's trend has been clear and well-defined, the area of resistance currently being tested on a longer-term basis is imposing. And combine that with the fact that a very big driver is sitting on the headlines, and while it may be easy to ascribe a hawkish lean from the FOMC, traders should be very careful with projecting too closely what the bank might actually do come Wednesday. As such, the forecast will be set to neutral until one of these scenarios can show more clearly, either USD-strength through this key zone of resistance or USD-weakness on the back of a dovish flip at the Fed. US Dollar Weekly Price Chart: Trading at a Troubling Area – Will a Rate Cut Finally Bring a Long-Term Breakout?
Chart prepared by James Stanley To read more: Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator. Forex Trading Resources DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you're looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we're looking at what we're looking at. If you're looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management. — Written by James Stanley, Strategist for DailyFX.com Contact and follow James on Twitter: @JStanleyFX http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| Crude Oil Price Chart Outlook Anchored to Technical Confluence Posted: 27 Jul 2019 05:15 PM PDT Hits: 12 CRUDE OIL PRICE WEEKLY TECHNICAL OUTLOOK
Crude oil prices closed flat last week after fluctuating 4% between key areas of technical confluence while traders struggle to determine the commodity's next direction. Crude oil prices have remained subdued since sliding nearly 10% earlier this month – the sharp selloff accelerated after a hard rejection at technical resistance we pointed out in our previous crude oil price technical outlook. CRUDE OIL PRICE CHART: 2-HOUR TIME FRAME (JULY 10, 2019 TO JULY 26, 2019)Despite the commodity attempting to claw back its string of losses over the last two weeks, crude oil price action has been relatively contained with WTI currently trading at $56.09. Yet, a short-term bullish trendline has begun to form as crude oil prices have recorded a string of higher lows since July 19 which could provide a degree of technical support going forward. Technicals appear damaged still, however, owing to the recent bit of aggressive selling. As such, several key resistance levels may keep bullish momentum at bay. Check out these Crude Oil Trading Strategies and Tips for Insight on How to Trade Oil CRUDE OIL PRICE CHART: DAILY TIME FRAME (NOVEMBER 29, 2018 TO JULY 26, 2019)
That said, bulls will look to eclipse the negative-sloping 20, 50 and 200-day simple moving averages in addition to technical resistance posed by Fibonacci retracement levels around $57.00-$57.50 headed into next week. Crude oil prices have consolidated around the current price zone previously this year, which could keep a lid on crude oil prices if the area of confluence prevents traders from pushing the commodity higher. Although, the previously mentioned short-term bullish trendline connecting the June 12 and July 24 intraday lows might propel crude oil prices higher. Find out the Top Crude Oil Facts Every Trader Should Know If price action can top $57.50 next week – the price level near the 38.2% Fibonacci retracement of crude oil's sharp climb to $66.00 off its December 24 low – oil trader sentiment might start to shift back in favor of bulls. Evidence of bullish momentum returning to crude oil prices could be provided by the RSI reclaiming a reading above 50. If these technical objectives can be overcome, it will likely open up the door for crude oil prices to test bearish trendline resistance from the April 23 and July 11 intraday swing highs. OIL PRICE VOLATILITY AND CRUDE OIL CHART: DAILY TIME FRAME (JANUARY 31, 2018 TO JULY 26, 2019)
As for oil price volatility, a break below the uptrend line forming since April would be constructive for further advances in crude oil prices given their strong inverse relationship. The 38.2% Fibonacci retracement of the near-vertical drop in crude oil prices from October 2018 to December 2018 also highlights the major area of confluence around the current price level which could be solidified as support next week. Conversely, another hard rejection at this key technical level remains a possibility.A push higher in oil volatility could serve as a bellwether indicating more downside in crude prices is likely. If WTI slips below this area alongside rising oil price volatility, crude oil bears could attempt to push the commodity toward the bottom printed last month around $51.00. What is the difference between WTI and Brent Oil? IG CLIENT SENTIMENT INDEX – CRUDE OIL PRICE CHART: DAILY TIME FRAME (JANUARY 28, 2019 TO JULY 26, 2019)
According to the latest IG Client Sentiment data, 66.6% of retail crude oil traders are net-long resulting in a long-to-short ratio of 1.99 to 1. Crude oil traders have remained net-long since July 12 despite prices sinking 6.9% lower since then. Although, changes in client positioning suggests that retail traders are growing less-optimistic over bullish crude oil price prospects seeing that the number of traders net-long is 2.7% higher than last week whereas the number of traders net-short is 14.0% higher than last week. — Written by Rich Dvorak, Junior Analyst for DailyFX.com Connect with @RichDvorakFX on Twitter for real-time market insight http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| Gold Prices May Suffer if FOMC Undermines Dovish Expectations Posted: 27 Jul 2019 12:15 PM PDT Hits: 6 GOLD FUNDAMENTAL FORECAST: BEARISH
See our free guide to learn how to use economic news in your trading strategy! Gold prices will have tunnel vision this week as their biggest concern will be the FOMC rate decision and commentary. The yellow metal's over 11 percent rise during the past 2 months may look increasingly overpriced if the central bank fails to meet or exceed the market's comparatively more dovish expectations. Overnight index swaps are pricing in two rate cuts by the September meeting with odds of a third by year-end. If the Fed fails to live up to market expectations – even if they announce a rate cut but have a less-dovish outlook– investors may perceive the Fed's action and commentary as relatively more hawkish. Gold's appeal as a non-interest-bearing asset may then erode and cause capital to shift from the yellow metal to the US Dollar, as opposed to what we have been seeing since December on the chart below. Gold Prices Sharply Rose After Federal Funds Futures Took a Hit
Relative to 2018, the Fed's dovish pivot has not been without reason. Economic data out of the US has been tending to underperform relative to economists' estimates and the trade war has negatively impacted producer sentiment. The IMF's recent publication of its updated world economic outlook strengthened the case for central banks adopting accommodative monetary policy. GOLD TRADING RESOURCES— Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
| US Dollar Seems to be Biased Upward on FOMC Rate Decision Posted: 27 Jul 2019 05:20 AM PDT Hits: 8 US DOLLAR FORECAST: NEUTRAL
See the latest US Dollar technical and fundamental forecast to find out what will drive prices in Q3! The US Dollar marched steadily higher last week, tracking a shift away from dovish extremes on rate futures-implied Fed monetary policy expectations. The measured rise was only briefly interrupted by event-driven volatility – like the seesaw swings immediately after the ECB rate decision – but the conviction behind it never appeared to waver. Pre-positioning ahead of next week's fateful FOMC monetary policy announcement probably explains such purposeful recovery. The markets appeared to have run out of room to price in an ever-more accommodative Fed policy outcomes. That made for asymmetrically high risk of a less dovish central bank than asset price levels presumed. Some portfolio rebalancing was apparently in order. US DOLLAR SEEMS BIASED UPWARD AFTER FOMC RATE DECISIONAs it stands, the markets put the probability of a 25bps rate cut at 83 percent, while the chance of a 50bps reduction is at 17 percent. Tellingly, that leaves no room for an on-hold scenario yet clearly leans in favor of the smaller adjustment. A survey of recent economic data as well as commentary from Fed officials seems to support just such a result. This likely means that the announcement's market-moving potential will come from the accompanying statement as well as the follow-on press conference with Chair Powell rather than the rate change itself. Traders will use the tone of the rhetoric in both for guidance on whether further stimulus expansion is on the menu in the near term. For their part, investors see the likelihood of further easing before year-end at a commanding 90 percent. A relatively even chance is being assigned to 50bps or 75bps of additional easing (34.4 and 37.9 percent, respectively). Coupled with the end of quantitative tightening – the Fed's balance sheet reduction scheme – this amounts to expectations of a rather dramatic policy shift in a very short time span. Once again, this seems to make the risk of a less-dovish outcome greater than the alternative. By extension, this means that the likelihood of a stronger US Dollar in the announcement's aftermath is greater than that of a weaker one. Follow-on ISM and payrolls data may fractionally alter the weekly result one way or the other, but the Fed will probably have the defining say on where prices are headed. — Written by Ilya Spivak, Sr. Currency Strategist for DailyFX.com To contact Ilya, use the comments section below or @IlyaSpivakon Twitter US DOLLAR TRADING RESOURCES OTHER FUNDAMENTAL FORECASTS: http://platform.twitter.com/widgets.js Can you get moneyed from fx trading? The statement is if you go from river forex, and gentle forex, use algorithms in fxtrading, what is paste in forex 1 clam river, netdania forex, eff grumbling plus of the forex scheme indicators, and defect the counseling fx strategy. We module win win all.  |
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