2024-04-17 07:30

UK CPI, GBP/USD Analysis UK CPI drops in March but less than expected Pound sterling reaction: Intraday gains eye 1.2500 level but GBP/USD selloff has been unrelenting Get your hands on the Pound sterling Q2 outlook today for exclusive insights into key market catalysts that should be on every trader's radar: UK CPI Drops in March but Less Than Expected UK headline CPI (year-on-year) eased to 3.2 from 3.4% last month, while core CPI dropped from 4.5% to 4.2%. The core measure strips out the volatile price effects relating to fuel and food to provide a better measure of the general prices of goods in the UK. The month-on-month print remained higher than the BoE would like, at 0.6% - matching the February pace of price increases. The monthly comparison saw declines in food prices while the recent rise in fuel prices added to the elevated measure. The Bank of England is likely to communicate the need to see data moving closer to target before acquiring the necessary level of confidence to start cutting interest rates, with markets pricing in a possible cut in August and fully price in a cut by the end of September. Sterling held up rather well against the US dollar in Q1 apart from a late slide in March as relatively high inflation in the UK meant the BoE was likely to keep rates above 5% for longer than its peers. Yesterday’s mixed data will also factor into the BoE’s decision-making process as average wages failed to show much progress. Average earnings including bonuses in Feb remained at 5.6% while the measure excluding bonuses eased slightly from 6.1% to 6%. Pound Sterling Immediate Reaction (GBP/USD) Cable (GBP/USD) headed higher in the wake of the release, as CPI surprised expectations on the upside. A more recent slowdown in the broader GBP/USD decline has helped in some way to provide momentary support. The daily close will help to provide a better indication of whether the selloff has been averted for now. GBP/USD 5-Minute Chart Source: TradingView, prepared by Richard Snow Currency trading requires an in-depth knowledge of the factors that determine price. Find out what makes the British pound tick: USD tailwinds include the safe haven bid from the uncertainty in the Middle East and Fed-ECB policy divergence, which is likely to keep the greenback elevated. GBP/USD eyes 1.2500 as near-term resistance if the current lift is to continue. A break and hold above this level is needed before considering a deeper pullback into what has been a sharp decline up until this point. GBP/USD Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/uk-inflation-surprise-cpi-drops-less-than-expected-boosting-gbp-20240417.html

2024-04-17 01:15

Most Read: US Dollar Gains as Powell Turns Hawkish; Setups on EUR/USD, USD/JPY, GBP/USD Gold and silver have long held an allure for traders seeking stability and potential profit in the tumultuous world of finance. These precious metals, revered for their intrinsic value and historical significance, offer unique opportunities for those looking to diversify their investment portfolios. However, navigating the complexities of trading gold and silver requires more than just a basic understanding of market trends. To truly succeed in this arena, traders must employ strategic approaches tailored to the unique characteristics of these commodities. In this article, we'll explore effective strategies and invaluable tips to help you maximize your trading potential in the precious metals market. Understanding Market Dynamics Before diving into trading strategies, it's essential to grasp the fundamental factors influencing the prices of gold and silver. Unlike stocks or currencies, precious metals often react differently to economic indicators and geopolitical events. While gold is typically viewed as a safe-haven asset, sought after during times of economic uncertainty or inflationary pressures, silver often exhibits more volatile price movements, driven by industrial demand alongside its status as a store of value. Technical Analysis: Chart Patterns and Indicators Technical analysis plays a crucial role in trading gold and silver. Traders frequently rely on chart patterns and indicators to identify potential entry and exit points. Common patterns such as triangles, flags, and head-and-shoulders formations can provide valuable insights into market sentiment and potential price movements. Additionally, indicators like moving averages, relative strength index (RSI), and stochastic oscillators can help traders gauge momentum and identify overbought or oversold conditions. Eager to gain insights into gold's future path? Discover the answers in our complimentary quarterly trading guide. Request a copy now! Trend Following vs. Counter-Trend Trading One of the key decisions traders face is whether to adopt a trend-following or counter-trend trading approach. Trend followers aim to capitalize on established market trends, entering positions in the direction of the prevailing momentum. This strategy can be particularly effective in markets characterized by strong, sustained trends. Conversely, counter-trend traders seek to profit from market reversals, identifying potential turning points where prices may be poised for a correction. Both approaches have their merits, and successful traders often employ a combination of both, depending on market conditions. Safe-Haven Play Gold and silver often see increased demand during periods of economic uncertainty or high inflation. Buying during these times and selling when markets stabilize can be a useful strategy. Risk Management and Position Sizing Effective risk management is paramount in trading gold and silver. Given the inherent volatility of these markets, traders must implement robust risk mitigation strategies to protect their capital. This includes setting appropriate stop-loss levels to limit potential losses and adhering to disciplined position sizing principles. Many experienced traders recommend risking no more than a small percentage of your trading capital on any single trade, thus preserving capital for future opportunities and mitigating the impact of inevitable losses. Stay Informed: Keep Abreast of Market News and Developments In the fast-paced world of commodities trading, staying informed is key to making informed trading decisions. Keep a close eye on economic indicators, central bank policies, geopolitical events, and developments in key industries that influence the demand for gold and silver. Additionally, monitor market sentiment and pay attention to trends in trading volumes and open interest, which can provide valuable clues about market direction. 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! Diversification: Beyond Gold and Silver While gold and silver are undeniably valuable components of a diversified investment portfolio, traders should not overlook opportunities in other asset classes. Consider exploring complementary markets such as precious metal mining stocks, exchange-traded funds (ETFs), or even cryptocurrencies, which offer alternative avenues for exposure to precious metals and related industries. Patience and Discipline Finally, perhaps the most underrated yet essential qualities of successful traders are patience and discipline. Trading gold and silver requires a cool-headed approach, free from emotional biases and knee-jerk reactions to market fluctuations. Stick to your trading plan, remain disciplined in your execution, and be prepared to weather the inevitable ups and downs of the market with resilience and determination. In conclusion, trading gold and silver offers a wealth of opportunities for savvy investors willing to put in the time and effort to understand these markets' intricacies. By adopting sound strategies, managing risk effectively, staying informed, and maintaining discipline, traders can navigate the complexities of precious metal trading with confidence and increase their chances of success in this dynamic and rewarding arena. https://www.dailyfx.com/news/mastering-strategies-to-trade-gold-and-silver-insights-on-precious-metals-20240417.html

2024-04-16 20:30

Most Read: Market Outlook & Sentiment Analysis: Silver, NZD/USD, EUR/CHF The U.S. dollar (DXY) gained on Tuesday on soaring U.S. Treasury yields, with the 2-year note coming within striking distance from overtaking the psychological 5.00% level. Fed Chairman Powell reinforced the current market dynamics by admitting at a forum in Washington that progress on disinflation has slowed and that firmer price pressures have introduced new uncertainty about the timing of rate cuts. Powell's comments indicate that policymakers will need more time and better data to gain greater confidence in the inflation outlook before dialing back on policy restraint. The fact that borrowing costs are going to remain higher for longer should be bullish for the U.S. dollar, especially as other key central banks, such as the ECB and the Bank of England, begin to move closer to easing their stance. Setting aside fundamental analysis, the next section of this article will center on examining the technical outlook for three U.S. dollar FX pairs: EUR/USD, USD/JPY and GBP/USD. Here, we'll dissect critical price thresholds that can act as support or resistance later this week – levels crucial for effective risk management and strategic positioning. EUR/USD FORECAST – TECHNICAL ANALYSIS EUR/USD continued to lose ground on Tuesday, confirming Monday's bearish breakdown (1.0635) and signaling potential for further weakness. The lack of visible support areas around current levels increases the likelihood of a slide towards the 2023 low near 1.0450. Conversely, should EUR/USD mount a comeback and reclaim the 1.0635 threshold, resistance is anticipated at 1.0700. Further gains here on out could direct attention to 1.0725. Bears must steadfastly protect this technical ceiling; any breach might trigger a rally towards the 50-day and 200-day simple moving averages, situated close to 1.0820. EUR/USD PRICE ACTION CHART EUR/USD Chart Created Using TradingView Interested in learning how retail positioning can shape USD/JPY’s trajectory? Our sentiment guide explains the role of crowd mentality in FX market dynamics. Get the free guide now! USD/JPY FORECAST – TECHNICAL ANALYSIS USD/JPY extended its advance on Tuesday, consolidating above 154.50 and hitting its highest point since June 1990. With buyers at the steering wheel, a potential move towards channel resistance at 155.80 may be on the horizon; however, caution is warranted given overbought market conditions and the growing possibility of FX intervention by the Japanese government. On the flip side, should buying pressure diminish and prices turn lower, initial support looms at 153.20. On further weakness, the focus will be on the 152.00 handle. The pair is likely to stabilize around this level during a pullback, but in the event of a breakdown, we can’t rule out a quick descent towards 150.80, followed by 150.50. USD/JPY PRICE ACTION CHART USD/JPY Chart Created Using TradingView Fine-tune your trading skills and stay proactive in your approach. Request the GBP/USD forecast for an in-depth analysis of the pound’s Q2 outlook. GBP/USD FORECAST – TECHNICAL ANALYSIS GBP/USD weakened modestly on Tuesday but remained above support at 1.2430. To prevent a deeper retracement, bulls must defend this floor tooth and nail; any lapse could usher in a move towards 1.2325. Further losses beyond this threshold might set the stage for a drop toward the October 2023 lows near 1.2040. On the other hand, if sentiment turns bullish again and GBP/USD initiates a reversal, key resistance awaits at 1.2525. Beyond this level, focus shifts to the 200-day simple moving average at 1.2580, then to 1.2650, where the 50-day simple moving average intersects with two important short-term trendlines. GBP/USD PRICE ACTION CHART GBP/USD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-gains-as-powell-turns-hawkish-setups-on-eur-usd-usd-jpy-gbp-usd-20240416.html

2024-04-16 17:30

Most Read: US Dollar’s Outlook Brightens; Setups on EUR/USD, USD/JPY, GBP/USD The allure of following the crowd is strong when it comes to trading financial assets – buying when the market is gripped by euphoria and selling when panic takes hold. Yet, experienced traders recognize the potential hidden within contrarian approaches. Tools like IG client sentiment offer a valuable peek into the market's collective mood, possibly revealing moments where excessive bullishness or bearishness could foreshadow a reversal. Of course, contrarian signals aren't foolproof. They become most powerful when integrated into a well-rounded trading strategy. By thoughtfully blending contrarian observations with technical and fundamental analyses, traders gain a richer understanding of the forces at play – dynamics that the majority might overlook. Let's explore this concept by examining IG client sentiment and its potential influence on silver, NZD/USD and EUR/CHF. Silver Forecast – Market Sentiment IG data reveals a bullish tilt in sentiment towards silver, with 72.58% of traders currently net-long, resulting in a long-to-short ratio of 2.65 to 1. However, this bullishness has decreased compared to yesterday (down 3.75%) and last week (down 9.32%). Our approach often incorporates a contrarian perspective. While the prevalent bullishness could signal potential weakness in silver prices, the recent decrease in net-long positions introduces a degree of uncertainty. This shift suggests a possible reversal to the upside may be in the cards, despite the overall net-long positioning. Important Note: These mixed signals highlight the necessity of combining contrarian insights with technical and fundamental analysis for a more comprehensive understanding of market dynamics. Frustrated by trading setbacks? Take charge and elevate your strategy with our guide, "Traits of Successful Traders." Unlock essential strategies to steer clear of frequent pitfalls and costly missteps. NZD/USD Forecast – Market Sentiment IG data indicates a strong bullish bias towards NZD/USD among retail traders, with 72.35% of clients currently holding net-long positions. This translates to a long-to-short ratio of 2.62 to 1. The number of net buyers has risen significantly since yesterday (up 7.22%) and compared to last week (up 11.23%). Our trading strategy often leans towards taking a contrarian perspective. The widespread bullishness on NZD/USD suggests the pair may have room to weaken further over the coming days. The ongoing increase in net-long positions strengthens this bearish contrarian outlook. Important note: While contrarian signals provide valuable insights, they are most effective when combined with technical and fundamental analysis. Always conduct a thorough market assessment before making any trading decisions. Interested in learning how retail positioning can offer clues about EUR/CHF’s directional bias? Our sentiment guide contains valuable insights into market psychology as a trend indicator. Get it now! EUR/CHF Forecast – Market Sentiment As per the latest data from IG, 55.76% of clients are bullish on EUR/CHF, indicating a long-to-short ratio of 1.26 to 1. Traders maintaining net-long positions have risen by 8.33% since yesterday and by 4.66% from last week, whereas clients with bearish wagers have dropped by 1.01% compared to the previous session and by 17.99% relative to seven days ago. We often adopt a contrarian approach to market sentiment. The current predominance of net-long traders suggests a potential further decline for EUR/CHF in the short term. The increasing number of buyers compared to both yesterday and last week, alongside recent changes in positioning, strengthens our bearish contrarian trading outlook on EUR/CHF. Important Note: Remember that contrarian signals offer just one piece of the trading puzzle. Integrate them with thorough technical and fundamental analysis for a more comprehensive decision-making process. https://www.dailyfx.com/news/market-outlook-sentiment-analysis-silver-nzd-usd-eur-chf-20240416.html

2024-04-16 15:03

Gold (XAU/USD) Analysis Geopolitical uncertainty keeps markets on edge Gold prices remain elevated as the bullish outlook remains intact Get your hands on the Gold Q2 outlook today for exclusive insights into key market catalysts that should be on every trader's radar: Geopolitical Uncertainty Keeps Markets on Edge The recent back and forth between Israel and Iran is the latest development in the ongoing conflict in the Middle East. Many representatives to the United Nations have urged for cool heads to prevail after Iran retaliated to a targeted Israeli strike that killed two of its senior members of Iran’s Islamic Revolutionary Guard Corps. Israel has announced its intention to respond to the barrage of drones launched at the nation, keeping gold elevated and weighing on major indices, although indices are also being impacted by the prospect of rates remaining higher for longer. Gold volatility, similar to gold prices, peaked but have recently eased lower after Iran considered the matter settled. The threat of a broad, direct conflict between two large powers in the Middle East represents a risk to the market and market sentiment. Investors may seek temporary shelter via traditional safe haven plays like the US dollar or gold – both of which remain elevated. Further stock market losses also help raise the attractiveness of the precious metal. 30-Day Implied Gold Volatility (GVZ) Source: TradingView, prepared by Richard Snow Gold Prices Remain Elevated as the Bullish Outlook Remains Intact Gold has risen in phenomenal fashion ever since the ‘morning star’ formation back in February and in spite of the recent revelation that the Fed may be delayed in cutting interest rates due to robust US data. Gold prices spiked to the new all-time high around $2430 on Friday before pulling back and even ending the day in the red. The market remains heavily within overbought territory, something that isn’t too uncommon in runaway markets. Gold is a niche market with many fundamental determinants of its price. Learn the ins and outs of gold trading in our comprehensive guide below: Further bullish tailwinds would highlight the all time high once again which remains a possibility as long as prices remain above the 1.618% Fibonacci extension of the major 2020 to 2022 decline. Any meaningful move to the downside would need to test the prior all-time high of $2222 to entertain a larger reversal but for now, the bullish outlook remains well intact. Gold (XAU/USD) Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/gold-remains-at-elevated-levels-amid-ongoing-geopolitical-uncertainty-20240416.html

2024-04-16 13:30

Safe Havens in Troubled Times In times of economic uncertainty and global turmoil, investors often seek out safe-haven assets to protect their wealth and minimize risk. Among the most popular haven assets are the US dollar, gold, the Swiss franc, and the Japanese yen. These assets have historically demonstrated resilience and stability during periods of market volatility, geopolitical tensions, and economic downturns. US Dollar The US dollar is the world's primary reserve currency and is widely considered a safe-haven asset due to its global dominance and the United States' economic and political stability. The US economy is the largest in the world, and the dollar is used in a significant portion of international trade and financial transactions. When global markets are in turmoil, investors often move to the US dollar, as it is seen as a reliable store of value. The increased demand for the dollar during uncertain times can lead to its appreciation against other currencies. Gold Gold has been a traditional safe-haven asset for centuries, as it is a tangible, finite resource that is not tied to any particular country or economy. During periods of economic instability, geopolitical tensions, or high inflation, investors often turn to gold as a hedge against market volatility and currency fluctuations. Gold is seen as a reliable store of value and a means of preserving wealth over the long term. When investors lose confidence in other assets, such as stocks or bonds, the demand for gold typically increases, driving up its price. Swiss Franc The Swiss franc is another popular haven asset, thanks to Switzerland's long-standing political neutrality, stable economy, and strong banking system. Switzerland has a reputation for financial stability and has historically maintained low inflation rates. The Swiss franc is also backed by substantial gold reserves, further enhancing its appeal as a go-to, risk-off currency. During global uncertainty, investors may seek to hold Swiss francs to diversify their portfolios and protect their wealth. Japanese Yen The Japanese yen is often considered a safe-haven asset, particularly during periods of economic uncertainty in Asia. Japan has a large, developed economy known for its political stability and low interest rates. The country's high domestic savings rate and the yen's role as a funding currency in carry trades also contribute to its safe haven status. When investors become risk-averse, they may unwind their carry trades, leading to an appreciation of the Japanese yen. Our Q2 Japanese Yen Analysis is Available Below It is important to note that while these assets are generally considered safe havens, their performance can vary depending on the specific circumstances of the crisis or turmoil. In some cases, the US dollar may outperform gold, while in others, the Swiss franc may be the preferred choice. Additionally, the concept of a safe haven asset can evolve, and new assets may emerge as safe havens over time. https://www.dailyfx.com/news/why-major-currencies-and-gold-are-safe-havens-in-times-of-crisis-20240416.html