2024-04-05 15:50

Most Read: Trading EUR/USD, USD/JPY, and GBP/USD: Strategies for the Most Liquid FX Pairs USD/JPY advanced on Friday (+0.22% to 151.60), inching closer to horizontal resistance at 152.00 after strong U.S. jobs data boosted U.S. Treasury yields across the curve. For context, the latest employment report showed that U.S. employers added 303,000 workers in March, well ahead of estimates of 200,000 payrolls - a sign that the U.S. labor market is still firing on all cylinders. Strong hiring momentum, coupled with solid wage growth, may force the Fed to delay the start of its easing cycle, possibly until the third or even fourth quarter, to prevent inflationary pressures from reaccelerating sharply. The possibility that interest rates will remain higher for longer in the U.S. should be a tailwind for the U.S. dollar, keeping it biased to the upside in the near term. While the greenback may have room to gain additional ground against some of its major peers, it is uncertain whether it can continue to appreciate relentlessly against the yen, as Japanese authorities have stepped up verbal intervention in recent days whenever the USD/JPY exchange rate flirted with breaching the 152.00-point threshold. This may be the line in the sand for Tokyo. Eager to discover what the future holds for the U.S. dollar? Delve into our quarterly forecast for expert insights. Get your free copy now! Focusing on techincal analysis, USD/JPY has traded within a narrow range over the past two weeks, with prices bouncing between resistance near 152.00 and support at 150.90, signaling a phase of price action consolidation may be underway. In terms of possible scenarios, a drop below 150.90 can open the door for a pullback towards the 50-day simple moving average at 149.75. On further weakness, attention may shift towards channel support at 148.85. On the flip side, a bullish breakout could usher in a rally towards 155.25, provided that the Japanese government refrains from intervening and allows the market to self-adjust. However, such an outcome appears unlikely. USD/JPY TECHNICAL CHART USD/JPY Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-jpy-tiptoes-towards-bullish-breakout-after-strong-us-jobs-data-what-now-20240405.html

2024-04-05 13:00

US Dollar and Gold Analysis and Charts US NFPs - 303k vs 200k expectations and a revised lower 270k February print. Gold sheds $10/oz. post-release as the US dollar turns higher. For all major central bank meeting dates, see the DailyFX Central Bank Calendar The latest Jobs Report (NFPs) shows the US labor market in rude health with 303k new jobs added in March, trouncing forecasts of 200k. The unemployment rate slipped 0.1% lower to 3.8%, while average hourly earnings m/m met forecasts of 0.3%. Nonfarm private payrolls also beat forecasts, 232k compared to 160k. The US dollar index added 30 ticks after the release, continuing Thursday’s late move higher after Federal Reserve member Neel Kashkari openly queried if rate cuts were appropriate this year. Today’s strong labor report will further stoke fears that inflation may become stickier than expected, meaning US rates will be left on hold for longer. Market rate cut probabilities were trimmed slightly after the NFP release with the June meeting now seen as just 56/44 in favour of a 25 basis point cut. US Dollar Index Daily Chart Gold’s recent rally stalled post-release with a haven still supporting the precious metal as Israel and Iran continue to warn of further military action. Gold Daily Price Chart All Charts via TradingView Retail trader data shows 43.87% of Gold traders are net-long with the ratio of traders short to long at 1.28 to 1.The number of traders net-long is 1.06% higher than yesterday and 13.69% higher from last week, while the number of traders net-short is 5.61% lower than yesterday and 8.50% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Gold prices may continue to rise. 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 you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/us-nfps-trump-expectations-us-dollar-grabs-a-bid-gold-slips-but-retains-haven-support-20240405.html

2024-04-05 12:05

Oil (Brent, WTI) News and Analysis OPEC sticks to Q2 supply agreement as US Cushing storage declines – oil bid Brent, WTI find momentary resistance but the bullish posture remains intact Find out what our analysts envision for the oil market in the second quarter by reading out full Q2 oil forecast: OPEC Maintains Q2 Supply Policy, US Storage Dips OPEC met this week with the organization largely expected to stick to the prior agreement for oil supply in Q2. Numerous officials, who wished to remain unnamed, were cited by Reuters in the lead up to the meeting that took place online on Wednesday. In addition, US stocks declined in the week ending 29 March to help spur on the rising oil price. However, much of the headlines this week revolved around the latest Israeli attacks which killed several aid workers and caused renewed outrage from global leaders. The UAE warned of a ‘cold peace’ if the current state of affairs continues. President Biden demanded that immediate aid be allowed to reach citizens in Gaza and strongly urged President Netanyahu to protect citizens. The US Secretary of State Anthony Blinken was rather direct on the matter, stating, “if we don't see the changes that we need to see, there will be changes in our policy." It appears that Israel’s strongest ally is finding it increasingly difficult to support the recent turn of events and lack of relief for ordinary citizens. The oil market has risen in response to the elevated tensions and threats of an Iranian response after Israel targeted the Iranian embassy in Damascus. In addition, the oil demand outlook appears robust after OPEC made no further alterations to its forecast and major economies witnessed some encouraging PMI numbers. Brent Crude Oil Hits $90 but Struggles to Push Forward Ahead of NFP The longer-term bullish recovery shifted into another gear after finding support a little over a week ago at $85. Yesterday, Brent prices soared well over $90 a barrel, finding momentary support at the 38.2% Fibonacci retracement of the major 2020-2022 rise. After such a sharp advance it would not be surprising for oil prices to moderate and even pullback over the short-term now that oil has entered overbought territory on the RSI. Immediate support lies at trendline support (former resistance) and $89 thereafter. A hold above $89 maintains the bullish outlook. Brent Crude Daily Chart Source: TradingView, prepared by Richard Snow WTI Conquers $86, as Bullish Momentum Wanes Ahead of NFP WTI prices rose above $86 yesterday and remain rather elevated in the moments before the NFP report. $85.90/$86 is the most immediate level of interest with the prospect of a pullback towards the ascending trendline (former channel support) a reality at such overbought levels. WTI (CL1! Continuous futures) Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/brent-crude-prices-hit-90-as-geopolitical-tensions-flare-up-20240405.html

2024-04-05 08:01

Japanese Yen Prices, Charts, and Analysis USD/JPY remains near multi-decade high despite official warning. US NFPs may prompt BoJ intervention. The Japanese Yen picked up a small bid in early European trade after PM Kishida warned fx markets that officials will take appropriate action if there are any further ‘excessive fx moves.’ In what is a verbal warning to Yen speculators, PM Kishida outlined how excessive volatility and disorderly FX moves could hurt financial stability and the Japanese economy and won’t be tolerated. Verbal intervention by either the government or the BoJ is seen as a precursor to official intervention to move the level of the Japanese Yen. Bank of Japan (BoJ) – Foreign Exchange Market Intervention Friday’s early warning comes a few hours before the latest US Jobs Report (NFPs), a closely watched release that can affect the value of the US dollar. This month’s report comes on the heels of some hawkish commentary from Fed policymaker Neel Kashkari who said on Thursday that if US inflation remains sticky, then rate cuts this year may not be needed. Financial markets are still penciling in three 25-basis point cuts in 2024, but any signs of a strong labor market in today’s NFP release could change this forecast. USD/JPY has ticked lower post-official commentary but remains within touching distance of a multi-decade high around the 152 level. The technical outlook for USD/JPY remains positive with a break above 152 opening the way for further gains. The fundamental outlook however suggests that any further move higher will not be tolerated, leaving the market in limbo. Today’s US Jobs Report and any further official Japanese commentary, or intervention, could see the pair move sharply, one way or another. USD/JPY Daily Price Chart Retail trader data shows 14.69% of USD/JPY traders are net-long with the ratio of traders short to long at 5.81 to 1.The number of traders net-long is 17.67% lower than yesterday and 5.51% lower than last week, while the number of traders net-short is 6.00% lower than yesterday and 2.79% lower than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. What is your view on the Japanese Yen – 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/japanese-yen-usd-jpy-on-edge-after-official-verbal-intervention-nfps-next-20240405.html

2024-04-05 00:50

Most Read: US Jobs Report Preview: Market Impact Analysis; Setups on USD/JPY, Gold Prices Breakout trading is a popular strategy that seeks to profit from sudden, powerful price movements that breach established price ranges. Traders watch for assets consolidating within a well-defined range, often signaled by chart patterns like triangles or channels. When the price of the underlying bursts out of this range, either to the upside or the downside, it's known as a breakout. Why Breakouts Matter Breakouts often signify an influx of buying or selling pressure, suggesting a possible shift in market sentiment. A breakout can mark either the beginning of a new trend or the continuation of an existing one. By entering a trade as the price breaks out, traders aim to ride the wave of momentum. Elevate your trading game with our free "Fundamentals of Breakout Trading" guide, packed with actionable tips and strategies for risk management. Trading the Breakout To enter a breakout trade, traders often place an order just beyond the support or resistance level. This ensures the position is activated only if there is sufficient momentum to confirm the breakout. Setting stop-loss orders is crucial to mitigate risk in case of false breakouts. Profit targets are typically set using technical analysis techniques, such as projecting price moves based on the size of the consolidation pattern. Key Points to Keep in Mind: Breakouts often occur along with increased volume, confirming the move. False breakouts can happen, so risk management is essential. Breakouts can signal the start of a new trend or a continuation of the existing one. Now that we have discussed trade strategies that take advantage of explosive moves after key levels are invalidated, let's explore two compelling configurations ripe for a potential breakout on EUR/USD and oil prices (WTI futures). EUR/USD TECHNICAL ANALYSIS EUR/USD ticked up Thursday but failed to push past a key resistance at 1.0865, created by the 50% Fibonacci retracement of the 2023 selloff, with prices pulling back off those levels after a bout of risk-aversion. When it was all said and done, the pair stabilized above 1.0835, slightly above the the 50-day and 200-day simple moving averages. If the market mood improves again, fueling a euro recovery, breakout traders should focus on the 1.0865 hurdle. A decisive breach of this technical ceiling accompanied by strong volume could trigger a rally towards trendline resistance near 1.0920. On further strength, bulls are likely to set their sights on the March high located a tad below the 1.1000 handle. In terms of risk management, an unsuccessful breakout followed by a sharp reversal below the aforementioned moving averages could signal a fakeout. To avoid being caught in a losing position, traders may consider placing a stop-loss order just below these SMAs, as a move below these indicators could pave the way for an important bearish shift. EUR/USD TECHNICAL CHART EUR/USD Chart Created Using TradingView CRUDE OIL PRICES TECHNICAL ANALYSIS WTI crude oil futures have been in a solid uptrend trend since early February, a phase when the commodity has managed to establish consecutive higher highs and higher lows. This upturn has also allowed prices to decisively cleared both the 50-day and 200-day SMAs, offering a bullish technical picture for the medium term. However, the market's stretched condition, signaled by the 14-day RSI, suggests a period of consolidation might precede the next leg higher. If consolidation occurs and relieves overbought pressure, a breakout strategy could be viable. Traders awaiting such a scenario should closely monitor technical resistance at $89.00, the 38.2% Fibonacci retracement of the 2022/2023 slump. An eventual break above $89.00 could reinforce the upside momentum, creating the right conditions for a possible rally towards the 2023 high around the psychological $95.00 mark. Above that barrier, all eyes will be on $96.92, the 50% Fib retracement. In the event of a bearish reversal, confluence support can be spotted at $83.25, followed by $79.50. WTI CRUDE OIL PRICE CHART Crude Oil Price Chart Created Using TradingView https://www.dailyfx.com/news/forex-eur-usd-and-oil-awaiting-fibonacci-resistance-breakout-for-bullish-continuation-20240405.html

2024-04-04 22:30

EUR/USD, USD/JPY, and GBP/USD are among the most heavily traded currency pairs in the forex market. Each pair boasts unique characteristics and dynamics, demanding tailored trading approaches. Here's a breakdown of how to tackle these majors: EUR/USD: The World's Most Liquid Pair Typical behavior: Often exhibits range-bound movements, making it suitable for scalping and swing trading. Key drivers: Interest rate differentials between the Eurozone and the US, economic releases from both regions, and geopolitical risk sentiment. Strategies: Range trading: Look for overbought/oversold zones, target moves within the range's boundaries. Breakout trading: Identify breakouts from key support/resistance levels, hoping to ride the momentum. News-based trading: React to major economic releases (like NFP or ECB decisions) Elevate your trading skills with our exclusive guide on mastering USD/JPY trading techniques. USD/JPY: The "Risk Barometer" Typical behavior: Tends to have strong trend potential, driven by risk appetite. Carry trade potential (exploiting interest rate differences) also plays a role. Key drivers: Global risk sentiment, US and Japanese interest rates, "safe-haven" demand for the yen during turmoil. Strategies: Trend following: Ride long-term trends, using technical indicators to spot direction and momentum. Carry trade: Profit from interest rate differentials, but beware of sudden reversals during risk-off periods. News Trading: Volatility can spike around major data releases or central bank announcements. GBP/USD: "Cable" with a Volatile Streak Typical behavior: Prone to short-term volatility, with potential for large swings on news events. Key drivers: UK and US economic data, interest rate decisions from the Bank of England and the Fed. Strategies: Breakout trading: Capitalize on breaks of key technical levels with well-defined stop-losses. News-based Trading: React quickly to UK or US economic surprises. Range Trading: Can be suitable during quieter periods, but beware of sudden breakouts. Important Considerations for All Pairs Fundamental Analysis: Stay informed about economic indicators, central bank policies, and geopolitical events impacting each currency. Technical Analysis: Use charts to identify trends, support/resistance levels, and potential entry/exit points with indicators like moving averages and RSI. Risk Management: Always employ stop-loss orders to limit losses, and size your trades appropriately. Choose Your Style: Select the pair(s) and strategies that best fit your risk tolerance and trading personality. https://www.dailyfx.com/news/forex-trading-eur-usd-usd-jpy-and-gbp-usd-strategies-for-the-most-liquid-fx-pairs-20240404.html