2023-12-28 20:00

Another year and another lesson learned. As a day trader navigating the fast-paced and volatile world of financial markets, one crucial lesson stands out above the rest in 2023: mastering risk aversion. The ability to effectively manage and mitigate risks is not just a skill; it's a cornerstone of success in the dynamic realm of day trading. Day trading, with its focus on short-term market movements, offers the allure of quick profits but also poses significant risks and this proved particularly truthful in 2023. In my journey as a risk-averse day trader, I've learned that preserving capital is paramount, and it requires a disciplined approach to risk management. The first and foremost lesson is embracing the concept of setting realistic risk-reward ratios. Day traders are often enticed by the potential for high returns at times of extreme volatility (little volatility is good, too much is bad. In my humble opinion), but the key is not just in seeking profits; it's in ensuring that potential losses are controlled. Another critical aspect of risk aversion in day trading is diversification. While it might be tempting to concentrate on a few high-potential trades, a diversified portfolio can act as a buffer against unexpected market moves. Spreading investments across different assets or sectors helps to mitigate the impact of adverse events on the overall portfolio. This is something that I benefitted from during the rise of tech sector stocks and Gold as we saw market sentiment sour at times during the year. Risk aversion also involves having a clear and well-defined exit strategy. Knowing when to cut losses and when to take profits is a skill that separates successful day traders from the rest. Implementing stop-loss orders, setting profit targets, and sticking to them even in the face of emotional impulses are vital components of an effective exit strategy. This in particular has been a long-term challenge for me and something I am very happy to get under control. It never hurts to repeat the obvious but the learning never stops neither does a commitment to continuous learning and adaptation. Markets evolve, and successful day traders stay ahead by staying informed. Regularly assessing market conditions, analyzing past trades, and adjusting strategies based on lessons learned contribute to a trader's ability to navigate the ever-changing landscape. In conclusion, the year has undoubtedly been a blessing with another invaluable lesson learned and skill learned (definitely not mastered, yet). To repeat myself the invaluable lesson learned is that successful trading is not just about making profits; it's about preserving capital through disciplined risk management. By embracing realistic risk-reward ratios, diversification, well-defined exit strategies, and a commitment to continuous learning, day traders can navigate the complexities of the market with confidence and resilience. In the world of day trading, risk aversion is not a limitation; it's a strategic advantage. https://www.dailyfx.com/news/forex-mastering-risk-aversion-a-day-trader-s-top-lesson-learned-20231228.html

2023-12-28 15:00

OIL PRICE FORECAST: Oil Slides but Conflicting Messages Regarding the Red Sea Keeps Buyers Interested. EIA Data Could Provide Bulls with Further Impetus Following API Numbers Yesterday. IG Client Sentiment Shows Traders are 84% Net-Long on WTI at Present. To Learn More About Price Action, Chart Patterns and Moving Averages, Check out the DailyFX Education Section. Most Read: What is OPEC and What is Their Role in Global Markets? Oil prices failed to maintain its momentum this week with a sharp selloff yesterday continuing through the Asian and European sessions today. US stockpile numbers released yesterday evening from the American Petroleum Institute (API) showed a buildup of 1.837 million barrels compared to 0.939 million barrels last week. Is the growth in inventory growth an indication of a possible slowdown in demand as well? RED SEA SUPPLY INTERRUPTIONS The tensions around the Red Sea shipping corridor have seen mixed reports over the past few days. This started with the supposed Red Sea task force which at this stage seems to be on its knees before it began. The alliance members, notably Spain and Italy have both tried to distance themselves through statements with many countries the Pentagon claim is involved seemingly shy to confirm their participation. According to the Pentagon the force is a defensive coalition of more than 20 Nations to combat the rising attacks by the Houthis in Yemen in response to the Israel/Palestine conflict. The lack of commitment by some Nations comes as international pressure continues to ramp up regarding the death of 21000 people in the Gaza strip, with President Biden believing the response in the Red Sea needs to be separated from these attacks. According to David Hernandez, a professor of international relations at the Complutense University of Madrid “European governments are very worried that part of their potential electorate will turn against them”. Saudi Arabia and United Arab Emirates earlier proclaimed no interest in the venture. Denmark's Maersk MAERSKb.CO will sail almost all of its vessels travelling between Asia and Europe through the Suez Canal, while diverting only a small number around Africa. A detailed breakdown showed that while Maersk had diverted 26 of its own ships around the Cape of Good Hope in the last 10 days or so. For now, it appears the Suez Canal will be used with more than 50 Maersk vessels scheduled to use the route in the coming weeks. Source: Refinitiv LOOKING AHEAD TO THE REST OF THE WEEK Looking to the rest of the week and the Geopolitical risk is likely to be the key driver and the most important risk to pay attetion to. Later today however we do have the EIA releasing its numbers with a print of around -2.85 million expected. TECHNICAL OUTLOOK AND FINAL THOUGHTS From a technical perspective WTI did appear to break the long-term descending trendline on Tuesday but the pullback since leaves e questioning whether it was a false breakout. As things stand the Daily candle could provide hope today, with a hammer candlestick close likely to embolden bulls tomorrow and heading into the New Year. Immediate resistance to the upside lies around the 75.00 mark before recent highs around the 76.00 handle comes into focus. There is a lot of hurdles to cross before the $80 a barrel mark comes into focus with resistance at 76.78, 77.84 and 78.55 all likely to provide some resistance. WTI Crude Oil Daily Chart – December 28, 2023 Source: TradingView Key Levels to Keep an Eye On: Support levels: 72.45 72.10 70.00 Resistance levels: 75.00 76.00 76.78 IG CLIENT SENTIMENT IG Client Sentiment data tells us that 84% of Traders are currently holding LONG positions. Given the contrarian view to client sentiment adopted here at DailyFX, does this mean we are destined to revisit the $70 mark? https://www.dailyfx.com/news/oil-price-forecast-oil-slides-on-conflicting-red-sea-reports-eia-numbers-ahead-20231228.html

2023-12-28 09:58

S&P 500 nears its January 2022 all-time record high The S&P continues to grind higher and is on track for its ninth consecutive week of gains and fifth straight positive day as Wednesday’s US Treasury auction went well and pushed yields lower and rate cut expectations forward to March of next year. The index is getting ever closer to its all-time record high, made in January 2022 at 4,817, despite being the most overbought since 1991. Nearly 50% of S&P 500 stocks trade above the 70% overbought level on their 14-day simple moving averages (SMA). Potential slips should find support around last week’s high at 4,778 with further support being found between the November and mid-December 2021 highs at 4,752 to 4,743. DAILY S&P 500 CHART Chart Prepared by Axel Rudolph Nasdaq 100 trades in new all-time record highs The Nasdaq 100’s rally off its late October low is in its ninth consecutive week of gains with it approaching the minor psychological 17,000 mark which may, at least short-term, act as resistance. On the data front are the US goods trade balance, initial jobless claims, wholesale inventories and pending home sales as well as EIA crude oil inventories which may add a bit of volatility to stock indices and the oil price amid low volume end-of-year trading. Potential support is seen around last week’s 16,863 high. DAILY NASDAQ 100 CHART Chart Prepared by Axel Rudolph https://www.dailyfx.com/news/s-p-500-within-whisker-of-january-2022-record-high-while-nasdaq-100-ploughs-on-20231228.html

2023-12-28 07:47

AUD/USD ANALYSIS & TALKING POINTS Aussie strength endures on rate cut expectations. US jobless claims data to come. Can AUD/USD confidently pierce long-term trendline resistance? AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP The Australian dollar has reached multi-month highs on the back of a weaker US dollar as markets continue to build on easing monetary policy expectations from the Federal Reserve. Money markets remain steadfast on roughly 155bps of cumulative interest rate cuts by the Fed in 2024 thus providing upside impetus for the pro-growth AUD. The Reserve Bank of Australia (RBA) is projected to begin cutting rates around May/June 2024 but incoming data will be of utmost importance as to overall guidance and timing of the dovish pivot to a more accommodative stance. China being a major trading partner with Australia from a commodities perspective will be under the spotlight as we prepare for the NBS manufacturing and non-manufacturing PMI report as the final high impact data print for 2023 (31 December). The nation has been adopting stimulus measures in an attempt to bolster the sluggish economic growth after COVID restrictions were lifted. Should there be an upside surprise from this data, the Aussie dollar may begin the new year on a solid footing. TECHNICAL ANALYSIS AUD/USD DAILY CHART Chart prepared by Warren Venketas, TradingView AUD/USD daily price action keeps the pair in overbought territory on the Relative Strength Index (RSI) as the 0.6900 psychological resistance level comes into consideration. Another factor to study is the weekly close with regards to whether or not AUD/USD closes below the long-term trendline resistance (black) as last week saw an unconvincing close marginally above this zone. This influential resistance zone has held firm since February 2021 and may expose 0.7000 should it be breached successfully. Looking at the respective moving averages, it would be wise to monitor the looming golden cross (blue) that may provide bulls with additional support. 0.7000 0.6900 Key support levels: 0.6822 Trendline resistance 0.6700 0.6596 IG CLIENT SENTIMENT DATA: BULLISH (AUD/USD) IGCS shows retail traders are currently net SHORT on AUD/USD, with 60% of traders currently holding SHORT positions. https://www.dailyfx.com/news/forex-aud-usd-price-forecast-aussie-dollar-eyes-us-jobless-claims-wv-20231228.html

2023-12-27 23:50

EUR/USD, GBP/USD, GOLD PRICE FORECAST: Treasury yields and the U.S. dollar tumble as interest rate expectations shift in a more dovish direction EUR/USD and GBP/USD rally, clearing important technical levels in the process Gold prices break above a major resistance region, setting the stage for additional gains in the near term Most Read: US Dollar on Cusp of Breaking Down, Key Levels to Watch in Final Days of 2023 U.S. Treasury rates have fallen sharply from their cycle highs set in October on bets that the Fed would ease its stance aggressively next year. Their relentless slide accelerated Wednesday in thin markets ahead of the New Year's holidays, with the 2- and 10-year yields sinking to multi-month lows, as seen in the chart below. US TREASURY YIELDS VS US DOLLAR Source: TradingView Falling yields sent the U.S. dollar plummeting, driving the DXY index to its weakest point in five months. Against this backdrop, EUR/USD, GBP/USD and gold prices rallied, overcoming important hurdles in the process. Below we analyze each of them separately from a technical standpoint. Fine-tune your trading skills and stay proactive in your approach. Request the EUR/USD forecast for an in-depth analysis of the euro’s fundamental and technical outlook! EUR/USD TECHNICAL ANALYSIS EUR/USD charged upwards on Wednesday, pushing past a key ceiling in the 1.1075/1.1095 area. If this bullish breakout is sustained in the near term, the pair may to gravitate towards channel resistance at 1.1165 in short order. On further strength, a retest of the 2023 highs could be in the cards. Conversely, if bullish sentiment fades and sparks a reversal, initial support is present within the 1.1075/1.1095 range, followed by 1.1020. Prices may stabilize in this region during a pullback, but a breakdown could rapidly propel a move toward 1.0935. EUR/USD TECHNICAL CHART EUR/USD Chart Created Using TradingView GBP/USD TECHNICAL ANALYSIS Following its recent rally, GBP/USD is in its strongest position since August, with prices steadily approaching an important ceiling extending from 1.2830 to 1.2850. Clearing this technical barrier may prove tough for bulls, but a successful breakout could set cable on course towards the 1.3000 handle. On the other hand, if market exhaustion triggers a setback, the first line of defense against a bearish assault lies at 1.2750-1.2735. Below this range, attention turns to the trendline support at 1.2675, followed by the psychological 1.2600 mark. GBP/USD TECHNICAL CHART GBP/USD Chart Created Using TradingView Wondering how retail positioning can shape gold prices? Our sentiment guide provides the answers you are looking for—don't miss out, get the guide now! GOLD PRICE TECHNICAL ANALYSIS After Wednesday’s upward thrust, gold (XAU/USD) has breached a critical resistance region stretching from $2,070 to $2,075. If this bullish breakout is sustained and prices start consolidating to the upside, the bulls could be emboldened to target the all-time highs near $2,150. On the flip side, if sellers regain the upper hand and drive XAU/USD downwards, closely observing the $2,075/$2,070 zone is crucial. If this support fails, bullish aspirations may be put on hold, potentially leading prices towards $2,050. On further weakness, the focus shifts to $2,010. GOLD PRICE TECHNICAL CHART Gold Price Chart Created Using TradingView https://www.dailyfx.com/news/forex-eur-usd-breaks-out-as-gbp-usd-surges-toward-resistance-gold-eyes-record-20231227.html

2023-12-27 18:05

US DOLLAR FORECAST The U.S. dollar, as measured by the DXY index, sinks to its lowest level in five months, with thin liquidity conditions likely amplifying the selloff Growing expectations that the Fed will substantially ease its stance in 2024 have been the main driver of the greenback's retreat in recent weeks This article offers an analysis of the U.S. dollar's technical and fundamental outlook, examining essential price thresholds that could act as support or resistance in the coming trading sessions Most Read: US Dollar in Risky Waters, Technical Setups on EUR/USD, GBP/USD, Gold The U.S. dollar, as measured by the DXY index, plunged to its weakest point in five months on Wednesday, pressured by a substantial drop in Treasury rates, with the 2-year yield sinking below 4.26%, its lowest level since late May. While market moves were likely amplified by thin liquidity conditions, characteristic of this time of year, wagers that the Federal Reserve will cut rates materially in 2024 have been the primary bearish driver for the greenback in recent weeks. The Fed’s pivot at its December FOMC meeting has reinforced ongoing market trends. For context, the central bank embraced a dovish stance at its last gathering, indicating that talks about reducing borrowing costs have begun, possibly as part of a strategy to prioritize growth over inflation. The chart below shows how the DXY index has been falling for a while, just as easing expectations for the upcoming year have trended higher in a meaningful way. For a comprehensive analysis of the U.S. dollar’s prospects, get a copy of our free quarterly outlook now! Source: TradingView From a technical standpoint, the U.S. dollar broke below 101.50 and sank toward support at 100.75 on Wednesday. Bulls must defend this area at all costs to curb downward pressure; failure to do so could result in a pullback toward the 2023 lows near 99.60. On further weakness, the focus shifts to 94.75. Conversely, if buyers return in force and spark a bullish bounce off current levels, overhead resistance looms at 101.50, followed by 102.00. Considering the prevailing sentiment, breaching this hurdle will be a formidable task for the bulls. However, if surpassed, attention will turn to 102.60 and 103.30 thereafter. US DOLLAR INDEX (DXY) CHART US Dollar Index (DXY) Chart Prepared Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-on-cusp-of-breaking-down-key-levels-to-watch-in-final-days-of-2023-20231227.html