2024-06-28 07:45

Gold (XAU/USD) & Silver (XAG/USD) Sentiment Analysis and Charts Gold: Traders Lean Bullish Despite Potential Price Decline Silver: Retail Sentiment Signals Potential Price Decline Gold (XAU/USD) Trading Outlook: Conflicting Signals as Retail Sentiment Shifts The latest IG retail trader data presents a nuanced picture for gold trading. With 57.34% of traders holding net-long positions and a long-to-short ratio of 1.34 to 1, the market appears bullish. However, our contrarian approach to crowd sentiment indicates potential downward pressure on gold prices. Recent shifts in trader positioning add complexity to the outlook. Net-long positions have dropped 17.44% since yesterday but increased 3.80% over the past week. Conversely, net-short positions have surged 19.70% daily while declining 2.78% weekly. These conflicting trends contribute to a mixed trading bias for gold. Gold Daily Price Chart Silver (XAG/USD) Latest: Retail Sentiment Reaches Extreme Levels Current retail trader data reveals an exceptionally bullish stance on silver, with 85.36% of traders net-long and a striking 5.83 to 1 long-to-short ratio. However, this extreme sentiment may paradoxically suggest a potential decline in silver prices, as our analysis typically counters crowd positioning. The bullish bias has intensified recently, with net-long traders increasing by 1.69% daily and 9.86% weekly. Meanwhile, net-short traders have decreased by 11.76% since yesterday and 24.81% over the week. These trends contribute to a strengthened silver-bearish contrarian trading bias, highlighting the importance of careful market analysis. Silver Daily Price Chart Charts via TradingView What is your view on Gold and Silver – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/gold-xau-usd-silver-xag-usd-updated-sentiment-analysis-20240628.html

2024-06-27 13:10

US Dollar Slips After US Durable Goods, Jobs Data, US Q1 GDP Meets Forecasts US Q1 GDP grows by 1.4%, as expected. Durable goods revisions and US continuing jobless data soften the US dollar. The US dollar index slipped lower after the latest batch of US data showed economic activity slowing down. The final Q1 US GDP figure came in as forecast at 1.4%, while the May Durable Goods release came in slightly better-than-expected at 0.1% vs forecasts of -0.1%. However, the April monthly figure was downgraded from an original 0.7% to 0.2%. In the labor space, US continuing jobless claims – the number of unemployed workers who filed for benefits at least two weeks ago – crept higher, rising to levels last seen in November 2021. US Continuing Jobless Claims Graph via Trading Economics Short-dated US Treasury yields turned three to four basis points lower… US Treasury Two-Year Yield …while the US Dollar Index gave back 30 pips and is currently trading at the low of the day. US Dollar Index Daily Chart What are your views on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/us-dollar-slips-after-us-durable-goods-jobs-data-us-q1-gdp-meets-forecasts-20240627.html

2024-06-27 08:10

Euro (EUR/USD) Latest National Rally leads the polls but is unlikely to win an outright majority. A fractured French government would weigh on the Euro. The first round of the French elections takes place this coming Sunday with the right-wing National Rally party (RN) seen heading the polls but without enough seats to form a government. The RN is predicted to receive anywhere between 31.5% to 35% of the vote, according to three recent polls, with the People’s Front, a left coalition is placed second with between 28% and 29.5% of the vote. President Macron’s alliance is forecast to get between 19.5% and 22% of the vote. With the current ruling party polling in third place, the fractured nature of the forecast vote will see French politics weigh on not just French assets but also the Euro in the coming days. The second, and final, French vote will occur on Sunday, July 7th. The most widely traded FX-pair, EUR/USD, has recently been driven lower by a combination of US dollar strength and Euro weakness. Later today the latest US durable goods data and the final reading of US Q1 GDP will be released today. While both of these releases can move the US dollar, traders will be looking forward to Friday’s US core PCE report for guidance ahead of the weekend. High-importance US data and this weekend’s French elections will pave the way for a volatile backdrop for EUR/USD traders. EUR/USD is back below 1.0700 and struggling to move higher. The series of lower highs and lower lows started in late December remains in place, and this will continue if the April 16 multi-month low is breached. Below here, a double low around 1.0516 made in late October 2023 becomes the next downside target. Initial resistance is seen around the 1.0750 area. EUR/USD Daily Price Chart All charts using TradingView Retail trader data shows 66.18% of traders are net-long with the ratio of traders long to short at 1.96 to 1.The number of traders net-long is 14.14% higher than yesterday and 25.04% higher from last week, while the number of traders net-short is 14.48% lower than yesterday and 22.26% lower from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EUR/USD-bearish contrarian trading bias. What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/euro-eur-usd-latest-renewed-volatility-ahead-us-pce-and-french-elections-20240627.html

2024-06-26 15:30

USD/JPY, Yen Analysis FX intervention rhetoric shifts up a gear USD/JPY completely disregards the fall in US-Japan bond spreads to trade higher Markets appear to be calling the bluff of Japanese officials as each intervention level has been surpassed since 2022 interventions The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Japan’s Top Currency Official Declares Recent Yen Weakness 'Not Justified' Japan’s top currency official Masato Kanda from the Ministry of Finance (MoF) issued his sternest warning yet against undesirable, speculative moves in the FX space. However, markets appear happy to call his bluff seeing that USD/JPY has moved effortlessly beyond prior levels where intervention took place. Kanda mentioned he is seriously concerned about the recent rapid weakness of the yen which is getting closer to the 4% gauge relied upon previously to judge a ‘rapid’ and undesirable decline in the currency. Ahead of the April FX intervention, Kanda clarified a 4% depreciation over a two-week period or a 10% decline over a month meets the definition. Since the May swing low, the yen had depreciated around 3.15% in the space of two weeks, getting close to the 4% rule of thumb. USD/JPY traded to an intra-day high (London session) at the time of writing at around 160.81 and has breached into oversold territory on the RSI. USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow USD/JPY Completely Ignores the Drop in US-Japan Bond Spreads Recent developments in Japan have led to Japanese Government bonds rising above the 1% mark again but USD/JPY found no relief, still trading near and above 160.00. The US-Japan bond spread typically guides USD/JPY as seen below, but the pair appears to have detached from the yield differential. The BoJ failed to provide details around a much-anticipated tapering of its bond portfolio in its last meeting where it previously spoke of reducing purchases that have kept Tokyo’s borrowing costs low. However, the BoJ stated this will be available at the July meeting at the end of next month. In the meantime, Friday could provide insight into the Bank’s bond buying appetite when the BoJ is scheduled to release its new bond buying schedule. A combination of a reduced schedule of bond purchases combined with a potentially lower PCE figure in the US could provide a slight reprieve for USD/JPY ahead of the weekend but that appears a tough ask given the recent reluctance to halt the ascent. Recent Disconnect Between USD/JPY and US-Japan 10Y Bond Spreads (orange) Source: TradingView, prepared by Richard Snow A Dangerous Game of Bluff: Markets vs the Ministry of Finance Markets appear to be calling the Ministry of Finance’s bluff, trading comfortably above 160.00 – the most recent level that prompted officials to sell tens of millions of dollars to fund massive yen purchases. Whatever transpires, this remains a pair with excessive potential volatility that can appear with no warning – underscoring the importance of prudent risk management. Prior intervention efforts attracted moves around 500 pips. Prior, Surpassed Instances of FX Intervention Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/usd-jpy-update-why-markets-don-t-appear-to-be-buying-the-mof-story-20240626.html

2024-06-26 08:18

Australian CPI, AUD Analysis Australian CPI rose more than expected in May, sending AUD higher on the possibility of another RBA hike Large speculators still need convincing when it comes to AUD AUD/USD rises, AUD/NZD extends the bullish reversal but overheating risks may soon appear The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Australian CPI Indicator Justifies Possibility of RBA Hike Australia’s monthly CPI indicator for May rose higher than expected in the early hours of Wednesday morning. The 4% reading exceeded the expectation of 3.8% and the April print of 3.6%, to add to the building narrative that the Reserve Bank of Australia (RBA) will have to seriously consider raising the cash rate again in August. Aussie inflation appears to be heading lower when observing the quarterly measures for both headline and the trimmed median (core) calculations of price pressures. However, the rise in the timelier monthly CPI indicator suggests inflation pressures have reemerged, taking the chance of a rate hike in August to 35% and 54% by September, according to market implied expectations. The RBA has already had to resume the rate hiking cycle in November of last year after the committee judged it was appropriate to hold interest rates from June onwards and may have to follow the same course of action in Q3. Source: Refinitiv, prepared by Richard Snow Large Speculators still Need Convincing when it comes to AUD Aussie net-short positioning is being reeled in, mainly via a reduction of short positions as opposed to an increase in longs. However, the trend of rising CPI data via the monthly indicator may persuade a greater adoption of the Aussie dollar but clearly the negative effect of a weaker Chinese economy is weighing on the Australian economic outlook and confidence in a stronger AUD. However, the Aussie has enjoyed some recent strength after the RBA minutes confirmed that group discussed a rate hike during the June meeting. Most developed central banks are contemplating rate cuts or have already sone so, highlighting the divergence in monetary policy that is growing between Australia and the rest of its peers. Aussie Net-Short Positioning Being Reduced via the CoT Report, CFTC Source: Refinitiv, prepared by Richard Snow AUD Market Reaction Unlike the Canadian dollar yesterday, the unexpected rise in Australian inflation sent AUD higher across a wide range of currencies after the data release as seen below via the 5-minute AUD/USD chart. AUD/USD 5-Minute Chart Source: TradingView, prepared by Richard Snow AUD/NZD saw a notable move higher, rising above the 50 SMA and the 1.0885 marker with ease. The pair has traded higher since the bullish reversal at 1.0740 but the pair is at risk of overheating soon as the RSI approaches overbought territory. The pair market notable pullbacks and even a reversal after recovering from overbought territory the last two instances so this is a development worth monitoring. AUD/NZD Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/aussie-cpi-surpasses-estimates-fueling-rba-hike-odds-aud-strengthens-20240626.html

2024-06-25 14:13

Canadian CPI, CAD Analysis Canadian CPI beats estimates, putting a July cut in jeopardy USD/CAD lifts momentarily but markets are focused on US GDP, PCE data CAD/CHF may see further joy after the SNB cut rates for the second successive time The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Canadian Inflation Catches Markets Off Guard with Upward Surprise in May Canadian measures of inflation wrongfooted markets today, coming in hotter-than-expected. Monthly and yearly headline inflation (CPI) both beat the maximum estimates of 0.4% and 2.7% respectively, coming in at 0.6% and 2.9%. Core inflation also rose above the prior measure of 1.6 to emerge at 1.8%. Learn how to prepare for high impact economic data or events with this easy to implement approach: Canadian inflation has been one of the success stories amongst developed markets, declining towards 2%. The Bank of Canada even decided to cut interest rates by 25 basis points the last time they met but the recent lift in price pressures has put a July cut in jeopardy. Source: Refinitiv, prepared by Richard Snow Market expectations for another Bank of Canada rate cut have decreased following the inflation data. Swap markets now indicate that investors believe there's a 46% probability of a rate reduction at the July policy meeting, down from 65% previously. The Bank of Canada recently took the lead among G7 nations in monetary easing, reducing its key interest rate by 0.25 percentage points to 4.75% earlier this month. BoC Implied Rate Cut Percentages and Basis Points Source: Refinitiv, prepared by Richard Snow Market Reaction: USD/CAD, CAD/CHF USD/CAD showed an initial reaction lower as the Canadian dollar firmed slightly against the greenback. The initial move, however, appears contained as traders await the final US GDP data for the first quarter and more importantly US PCE data on Friday – with lower prints carrying the potential to overpower this recent lift in USD/CAD. USD/CAD 5-Minute Chart Source: TradingView, prepared by Richard Snow CAD/CHF continues to rise, now breaking above the 200 SMA. The pair turned around after the bullish engulfing pattern provided a pivot point as the pair emerged from oversold conditions. CAD/CHF Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/canadian-inflation-catches-markets-off-guard-with-upward-surprise-in-may-20240625.html