2024-04-04 20:00

Most Read: US Jobs Report Preview - Market Impact Analysis; Setups on USD/JPY, Gold Prices Trading in financial markets can be rewarding, but it's also fraught with risks. Many beginners, and even experienced traders, often fall into common traps that can lead to losses. Understanding and avoiding these mistakes is crucial for long-term success and consistency. One of the most common mistakes traders make is failing to have a clear trading plan. Without a plan, traders may succumb to emotional decision-making, leading to impulsive trades based on fear or greed. A well-defined trading plan should include entry and exit strategies, risk management rules, and criteria for selecting trades. Following a plan helps traders stay disciplined and avoid making decisions based on emotions. Another mistake is overleveraging. While leverage can amplify profits, it also magnifies losses. Traders who use excessive leverage may find themselves facing margin calls or even wiping out their accounts. It's important to use leverage judiciously and consider the potential downside before taking on too much risk. Risk management is paramount in trading, yet many traders neglect this aspect. Failing to set stop-loss orders or risking too much capital on a single trade can lead to catastrophic losses. Traders should always prioritize capital preservation and limit their risk exposure on each trade. Implementing proper risk management techniques, such as setting stop-loss levels and diversifying trades, can help mitigate losses and protect trading capital. Emotional trading is another common pitfall. Fear and greed are powerful emotions that can cloud judgment and lead to irrational decisions. Traders may hold onto losing positions in the hope of a turnaround or exit winning trades too early out of fear of losing profits. Overcoming emotional biases requires discipline and self-awareness. Developing a trading plan and sticking to it can help mitigate the influence of emotions on trading decisions. Additionally, chasing trends without conducting thorough analysis is a mistake many traders make. FOMO, or fear of missing out, can lead traders to jump into trades without proper research, often buying at the peak of a trend. It's essential to conduct a thorough analysis, including technical and fundamental research, before entering a trade. Traders should also be wary of following the crowd and instead focus on making informed decisions based on their own analysis. In conclusion, avoiding common trading mistakes is essential for success in financial markets. By having a clear trading plan, managing risk effectively, controlling emotions, and conducting thorough analysis, traders can increase their chances of profitability and achieve long-term success in trading. https://www.dailyfx.com/news/forex-common-mistakes-to-avoid-when-trading-forex-or-other-assets-20240404.html

2024-04-04 17:15

US NONFARM PAYROLLS – USD/JPY, GOLD The U.S. dollar and gold prices will be very sensitive to the upcoming U.S. jobs report Market expectations suggest the U.S. economy created 200,000 payrolls in March Strong job growth should be positive for the U.S. dollar but bearish for gold prices Most Read: Decoding Fedspeak: How Central Banker Comments Move Markets – Gold & US Dollar Investors will be on edge on Friday as the U.S. Bureau of Labor Statistics is scheduled to release its latest nonfarm payrolls report. This closely watched economic survey holds significant sway over market sentiment, especially in relation to the Federal Reserve's monetary policy trajectory. In terms of consensus estimates, economists anticipate a moderation in job growth, forecasting the addition of 200,000 new jobs in March. This marks a slowdown compared to February's robust 275,000 added positions. The unemployment rate is expected to remain unchanged at 3.9%. Focusing on pay gains, average hourly earnings are projected to increase by a modest 0.3% month-over-month, bringing the yearly reading down to 4.1% from 4.3% previously, potentially easing some of the Fed's concerns about a wage-price spiral reinforcing already elevated prices pressures in the economy. Navigating the Potential Market Reactions How the markets respond to the NFP data will largely depend on whether the numbers exceed or fall short of expectations: Strong Report: A surprisingly strong jobs report could signal a resilient economy, leading the U.S. central bank to hold off on plans to ease interest rates imminently. This scenario should be bullish for the U.S. dollar, but is likely to put downward pressure on precious metals like gold and silver. Weak Report: A disappointing NFP release might indicate a cooling labor market. This could bolster market expectations for earlier interest rate cuts by the Fed, strengthening the case for a June move. Such a development could lead to a weaker U.S. dollar, providing potential support for gold and silver prices. The table below show FOMC meeting probabilities as of Thursday morning. Source: CME Group Beyond the Headline Numbers Traders need to carefully examine the report's details for clues about underlying trends in the labor market. Key factors to watch include: Participation Rate: An increase in the labor force participation rate suggests more people are entering the job market, a positive sign for the economy. Revisions to Previous Months: Pay close attention to any revisions in the jobs data from prior months, as these can influence market reactions. Prepare for Volatility Traders should brace for potentially sharp price movements and market volatility immediately following the NFP release. For this reason, it is important to employ sound risk management strategies and avoid making impulsive decisions based solely on this one data point. Consider the report's findings in the context of broader macroeconomic trends and the latest signaling from the Federal Reserve. Want to know where the U.S. dollar may be headed over the coming months? Explore key insights in our second-quarter forecast. Request your free trading guide now! USD/JPY FORECAST - TECHNICAL ANALYSIS USD/JPY traded within a confined range on Thursday, lingering just below overhead resistance at 152.00. This technical barrier warrants close attention, as a breakout might prompt intervention from the Japanese government to support the yen. Should such a scenario unfold, a rapid reversal below 150.90 could occur ahead a possible drop towards the 50-day simple moving average at 149.75. In the event that USD/JPY takes out the 152.00 level and Tokyo refrains from intervening, opting instead to allow market forces to find a new equilibrium for the exchange rate, buyers might gain confidence to launch a bullish attack on 155.25, a key barrier created by the upper boundary of an ascending channel in place since December of last year. USD/JPY PRICE ACTION CHART USD/JPY Chart Created Using TradingView GOLD PRICE FORECAST - TECHNICAL ANALYSIS After briefly touching an all-time high during the overnight session, gold prices retreated on Thursday, stepping back from the $2,305 threshold. Should downward pressure persist, support is scarce until the $2,225, implying the potential for a large retracement in the event of a breakdown before any signs of stabilization appear. Conversely, should bulls reclaim firm command of the market, resistance awaits at $2,305, as previously noted. In case of a breakout, prices would enter uncharted territory, making it challenging to pinpoint potential resistance levels. However, a notable area of interest may lie at $2,345, corresponding to an ascending trendline originating from the lows of March 2023. Eager to gain insights into gold's future path? Discover the answers in our complimentary Q2 trading forecast. Request a copy now! GOLD PRICE-ACTION CHART Gold Price Chart Created Using TradingView https://www.dailyfx.com/news/forex-us-jobs-report-preview-market-impact-analysis-setups-on-usd-jpy-gold-prices-20240404.html

2024-04-04 13:30

Japanese Yen (USD/JPY) Analysis and Charts USD/JPY is stuck in a narrow range The 152.00 level seems to be acting as a cap A strong US payrolls print might force the pace The Japanese Yen was a little weaker against the United States Dollar on Thursday, but the market seems to be extremely wary of pushing USD/JPY much higher. One major reason is that the Dollar is hovering around the 152-Yen level. Above that, investors suspect, the Bank of Japan’s hand might be forced against the weakness of its currency as it has been in the past. Finance Minister Shunichi Suzuki reportedly said on Tuesday that the ministry is watching market trends with ‘a high sense of urgency’, wanting to respond appropriately to ‘excessive’ currency movements. That’s extremely forthright central bank speak. He left the market concerned that 152 might be as far as USD/JPY will be allowed to go without Yen-buying intervention from the central bank. The currency is skirting 35-year lows and interest-rate differentials still overwhelmingly favor selling it in favor of the Dollar. Even though the BoJ has this year shifted away from its ultra-loose monetary policy settings, the Yen remains a chronic low-yielder even as the markets reassess the likelihood of heavy US interest-rate reductions this year. The BoJ will have its work cut out to halt this fundamental momentum, but on past evidence, it may well see value in slowing the process down. USD/JPY daily trade has narrowed just below the 152-handle in the past ten days. The next major trading cue is likely to be the US nonfarm payroll release on Friday. An upside surprise here could be extremely interesting as it would probably see the Dollar surge up beyond that point, with traders then effectively daring the BoJ to step in. USD/JPY Technical Analysis USD/JPY Daily Chart Compiled Using TradingView The clear narrowing of this market below the 152 barrier shows that the fundamentals are very much in charge now and likely to remain so until the BoJ either intervenes or the Dollar falls back away from that area of its own accord. There’s near-term channel support around the 151 psychological level, with support from late February in the 150.67 area waiting just below it. Key technical props remain some way below the market, with Fibonacci retracement support at 149.247 and an uptrend channel in wait at 148.663. IG’s own trading sentiment indicator finds the market extremely bearish at current levels, to the tune of a massive 83% of respondents. While this sort of level would normally cry out for a contrarian, bullish play, the sheer volume of bears is probably due entirely to those intervention fears. The uncommitted may be wiser to wait and see how those play out. --By David Cottle for DailyFX https://www.dailyfx.com/news/more-japanese-yen-weakness-may-prompt-the-bank-of-japan-to-step-in-20240404.html

2024-04-04 11:30

Gold Price Analysis and Chart US Dollar weakness pushing gold ever higher. US ISM data highlights weaker growth. Most Read: Gold Breakout Nears as Bullish Pennant Pattern Forms Wednesday’s US Services ISM data sent the US dollar lower, and gold higher, after the report showed business activity expanding in March for the 15th consecutive month but at a slower rate. The headline ISM Services PMI reading of 51.4 was lower than February’s reading of 52.6 and market expectations of a 52.7 print. As cost pressures eased, the closely followed Prices Index fell to 53.4 from 58.6 in February. Key points from the Institute for Supply Management report include: The Composite Index declined in March due to: Slower new orders growth Faster supplier deliveries Contraction in employment The report also highlighted: Ongoing improvements in logistics and supply chain Difficulty in backfilling positions Controlling labor expenses 'The Prices Index reflected its lowest reading since March 2020, when the index registered 50.4 percent; however, respondents indicated that even with some prices stabilizing, inflation is still a concern.’ US ISM Services Release The weaker US services data and the ongoing political tensions in the Middle East combined to send gold spinning higher and to a new record high. Gold has been moving higher since mid-February with the rally being confirmed along the way by a well-known bullish pennant chart setup. Pennant Patterns: Trading Bearish and Bullish Pennants The flagpole of roughly $150 when added to the pennant breakout produced an upside target of around $2,300/oz. and this has now played out. Traders should be aware that Friday’s US Jobs Report can reverse some of this move, especially if NFPs show a stronger-than-expected US labor market. The first level of support is seen around the $2,194/oz. area. Gold Daily Price Chart Chart via TradingView Retail trader data shows 40.90% of Gold traders are net-long with the ratio of traders short to long at 1.44 to 1.The number of traders net-long is 3.82% lower than yesterday and 6.38% lower than last week, while the number of traders net-short is 8.17% higher than yesterday and 18.05% higher than 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 is your view on Gold – 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-posts-a-fresh-all-time-high-above-2-300-as-us-nfps-near-20240404.html

2024-04-04 10:00

With Q1 posting a strong showing for US equities, find out if the second quarter is likely to perform in much the same way by reading our comprehensive Q2 equities forecast: Dow holds trendline support Sharp losses over the first two days of last week took the price back from near 40,000, but Wednesday’s session saw a stabilisation. The price continues to hold trendline support from the mid-January low, which provides an underpinning for a resumption of the move to new record highs. A break of trendline support would then see the 50-day simple moving average (SMA) come into view. Dow Jones Daily Chart Source: IG, ProRealTime Nasdaq 100 stabilises The index saw a strong rebound on Wednesday, bringing a halt to the drift lower of the past two weeks. If the 18,000 level continues to hold then a fresh move to a new peak could begin. If the price drops below 18,000 then the 50-day SMA is another area of possible support, swiftly followed by 17,800 and then 17,656 in the event of further declines. Nasdaq 100 Daily Chart Source: IG, ProRealTime Hang Seng moves higher The price bottomed out in the second half of March around 16,350, and since then it has continued to recover. While it remains below the declining 200-day SMA and below the high seen in the first half of March around 17,150, the overall move higher off the lows of January remains intact. For now the downtrend that dominated 2023 is on pause. A close back below 16,300 could signal that sellers have reasserted control, while a close above the 200-day SMA and then above the early March high continues to bolster the bullish view. Hang Seng Daily Chart Source: IG, ProRealTime https://www.dailyfx.com/news/dow-nasdaq-100-and-hang-seng-look-to-push-higher-20240404.html

2024-04-04 08:08

Euro (EUR/USD, EUR/CHF) News and Analysis Lower eurozone inflation points to June ECB rate cut EUR/USD lifts after dovish Fed speak and subdued US activity data EUR/CHF rises to significant level of resistance For further euro insight throughout the second quarter, read our comprehensive euro Q2 forecast: Lower Eurozone Inflation Points to June ECB Rate Cut Numerous ECB officials have communicated a preference for the first ECB rate cut to take place in June of this year, something that has only been reinforced by yesterdays lower than expected inflation data for the bloc. Year on year inflation data for Mach dropped to 2.4% after economists anticipated no change to last month’s 2.6% reading. The ECB will meet again next week Thursday where they are likely to indicate that June presents the favourable time to start cutting interest rates. Later this morning, final services PMI data for March are due, with the broader EU data expected to expand further. Thereafter the ECB releases the minutes from the March meeting. Then in the late afternoon, there are more Fed speakers to voice their opinions on current market conditions. EUR/USD Lifts after Dovish Fed Speak and Subdued US Activity Data The PMI data related to the services sector yesterday revealed a drop in both prices and new orders, helping to contribute to the lower headline reading which remains in expansionary territory for the time being. Notably, ahead of NFP tomorrow, the employment sub-index rose ever so slightly but remains in contraction (sub 50). The survey fits in with the narrative that the Fed will cut interest rates later this year as the economy appears to be moderating but remains strong on a relative basis when compared to Europe or the UK. Hence, EUR/USD has managed to recover some lost ground, now trading above the 200 day simple moving average (SMA). Interest rate differentials still heavily favour the US dollar but the euro is enjoying this temporary period of strength against the greenback. Therefore, an extended bullish move may face resistance ahead of the 1.0950 zone. NFP tomorrow is the major event risk of the week and typically FX pairs tend to ease into the report. EUR/USD Daily Chart Source: TradingView, prepared by Richard Snow Learn how to approach the world's most traded currency pair and other highly liquid FX pairs via our comprehensive guide below: EUR/CHF Rises to Significant Level of Resistance In the aftermath of the Swiss National Bank (SNB) rate cut, the franc remains vulnerable to further depreciation and this surfaces via EUR/CHF. The bullish move continues to mature, after accelerating in February when the prospect of rate cuts started to filer in. The pair trades well above the 200 SMA and continues higher after finding support at 0.9694. Resistance is currently in the process of being tested, at the 0.9842 handle last seen in July 2023 at a time when the RSI reveals a return to overbought territory after a temporary exit towards the end of March. EUR/CHF Daily Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/euro-update-weaker-us-activity-data-helps-the-euro-reclaim-lost-ground-20240404.html