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Macroeconomic Analysis And Trading Ideas

Central Bank Monetary PolicyObjectives of Monetary Policy The primary objectives of central bank monetary policy include: 1. Price Stability (Inflation Control) Maintaining stable prices is the most important goal of monetary policy. High inflation reduces purchasing power, while deflation discourages spending and investment. Most central banks aim for a moderate inflation target (for example, RBI targets 4% inflation ±2%). 2. Economic Growth Monetary policy supports sustainable economic growth by ensuring adequate liquidity and favorable credit conditions. During economic slowdowns, central banks stimulate growth through expansionary measures. 3. Employment Generation By influencing borrowing costs and investment activity, monetary policy indirectly affects employment levels. Lower interest rates encourage businesses to expand and hire more workers. 4. Financial Stability Central banks ensure stability in the banking and financial system by monitoring liquidity, credit flow, and systemic risks. 5. Exchange Rate Stability Monetary policy impacts capital flows and currency value. Stable exchange rates are important for trade and foreign investment. Types of Monetary Policy Monetary policy is broadly classified into two types: 1. Expansionary Monetary Policy This policy is adopted during economic slowdowns or recessions to stimulate growth. The central bank increases money supply and reduces interest rates to encourage borrowing and spending. Key features: Lower policy interest rates Increased liquidity Higher credit availability Boosts consumption and investment 2. Contractionary Monetary Policy This policy is used when inflation is high or the economy is overheating. The central bank reduces money supply and raises interest rates to curb excess demand. Key features: Higher interest rates Reduced liquidity Controlled inflation Slower economic activity Monetary Policy Instruments Central banks use various quantitative and qualitative tools to implement monetary policy. Quantitative (General) Instruments 1. Policy Interest Rates The policy rate is the benchmark interest rate at which central banks lend to commercial banks. Repo Rate (India): Rate at which RBI lends money to banks Reverse Repo Rate: Rate at which RBI borrows money from banks Lower rates stimulate growth; higher rates control inflation. 2. Open Market Operations (OMO) The central bank buys or sells government securities in the open market. Buying securities: Increases liquidity Selling securities: Absorbs liquidity OMO is a powerful tool for short-term liquidity management. 3. Cash Reserve Ratio (CRR) CRR is the percentage of deposits that banks must keep with the central bank. Higher CRR → Less lending capacity Lower CRR → More liquidity for banks 4. Statutory Liquidity Ratio (SLR) SLR requires banks to maintain a certain percentage of deposits in safe assets like government bonds. Changes in SLR affect banks’ ability to lend to the public. 5. Liquidity Adjustment Facility (LAF) LAF allows banks to borrow or park funds with the central bank on an overnight basis to manage short-term liquidity. Qualitative (Selective) Instruments 1. Credit Rationing Central banks may limit credit availability to specific sectors to control speculative activities. 2. Moral Suasion Central banks persuade commercial banks through meetings and advisories rather than formal rules. 3. Selective Credit Controls Credit limits are imposed on sensitive sectors like real estate or stock markets to prevent bubbles. Monetary Policy Transmission Mechanism The transmission mechanism explains how monetary policy decisions affect the economy. Key channels include: Interest Rate Channel: Changes in rates affect borrowing and spending Credit Channel: Impacts loan availability Exchange Rate Channel: Influences exports and imports Asset Price Channel: Affects stock and real estate prices Expectations Channel: Shapes inflation and growth expectations Effective transmission is essential for policy success. Role of Central Bank Independence Central bank independence ensures that monetary policy decisions are free from political pressure. Independent central banks focus on long-term economic stability rather than short-term political goals. Benefits of independence: Credibility in inflation control Market confidence Policy consistency Monetary Policy Committee (MPC) Many central banks operate through a Monetary Policy Committee. For example, India’s MPC consists of six members and decides policy rates through voting. MPC enhances: Transparency Accountability Predictability in policy decisions Impact of Monetary Policy on Financial Markets Monetary policy has a direct and strong impact on financial markets: Equity Markets: Lower rates usually boost stock prices Bond Markets: Interest rate changes affect bond yields and prices Currency Markets: Rate hikes strengthen currency; cuts weaken it Commodities: Inflation expectations impact gold and oil prices Traders and investors closely track central bank announcements. Challenges in Monetary Policy Despite its importance, monetary policy faces several challenges: Time lag between policy action and impact Global economic shocks Supply-side inflation Weak transmission mechanism Balancing growth and inflation Central banks must constantly adjust policies based on evolving conditions. Conclusion Central Bank Monetary Policy is a powerful tool for managing an economy’s growth, inflation, and financial stability. Through interest rates, liquidity management, and regulatory measures, central banks influence borrowing, spending, and investment behavior. While monetary policy cannot solve all economic problems, effective policy formulation and implementation play a crucial role in ensuring long-term economic stability. In a rapidly globalizing and financially interconnected world, the importance of credible, transparent, and responsive monetary policy has increased significantly. Understanding central bank monetary policy is essential for policymakers, businesses, investors, and traders alike.
OANDA:XAUUSDEducation
by GlobalWolfStreet
Macroeconomic Indicators & Central Bank Policies1. What Are Macroeconomic Indicators? Macroeconomic indicators are statistical data points that reflect the overall health and direction of an economy. Governments, central banks, and market participants use these indicators to assess economic performance, identify risks, and make policy or investment decisions. These indicators are broadly classified into growth, inflation, employment, and external sector indicators. 2. Key Macroeconomic Indicators a) Gross Domestic Product (GDP) GDP measures the total value of goods and services produced in an economy over a specific period. High GDP growth → economic expansion Low or negative GDP growth → slowdown or recession GDP can be measured using: Production approach Income approach Expenditure approach For markets, strong GDP growth often boosts equities, while weak growth increases expectations of monetary stimulus. b) Inflation Indicators Inflation reflects the rate at which prices rise over time. Common inflation measures: Consumer Price Index (CPI) – measures retail inflation Wholesale Price Index (WPI) – measures wholesale price changes Core Inflation – excludes food and fuel (more stable) Moderate inflation is healthy, but high inflation reduces purchasing power, while very low inflation or deflation slows economic growth. c) Employment & Labor Market Data Employment indicators show the strength of the labor market. Key metrics include: Unemployment rate Labor force participation rate Job creation numbers Wage growth Low unemployment generally signals economic strength, but extremely tight labor markets can fuel inflation through rising wages. d) Interest Rates Interest rates represent the cost of borrowing money and are heavily influenced by central banks. Low interest rates → encourage borrowing, spending, and investment High interest rates → reduce inflation but slow growth Interest rates directly impact stock markets, bond yields, real estate, and currencies. e) Industrial Production & Manufacturing Data Indicators such as: Industrial Production Index (IPI) Manufacturing PMI (Purchasing Managers’ Index) These measure output and business activity in the manufacturing sector. PMI above 50 indicates expansion; below 50 indicates contraction. f) External Sector Indicators These reflect a country’s global economic position: Trade balance Current account deficit (CAD) Foreign exchange reserves Exchange rate A stable currency and healthy forex reserves improve investor confidence and economic stability. 3. Role of Central Banks A central bank is the monetary authority responsible for maintaining economic and financial stability. Examples include: Reserve Bank of India (RBI) US Federal Reserve (Fed) European Central Bank (ECB) The primary objectives of central banks are: Price stability (control inflation) Economic growth Financial system stability Currency stability 4. Central Bank Monetary Policy Tools Central banks use monetary policy to control money supply and credit conditions. a) Policy Interest Rates These are benchmark rates that influence all other interest rates. Examples: Repo Rate (India) Federal Funds Rate (USA) Rate cut → stimulates growth Rate hike → controls inflation b) Open Market Operations (OMO) Central banks buy or sell government securities: Buying bonds → injects liquidity Selling bonds → absorbs liquidity OMOs help manage short-term liquidity in the banking system. c) Cash Reserve Ratio (CRR) CRR is the portion of deposits banks must keep with the central bank. Higher CRR → less money for lending Lower CRR → more liquidity d) Statutory Liquidity Ratio (SLR) SLR requires banks to hold a portion of deposits in safe assets like government bonds. It influences credit availability and banking stability. e) Quantitative Easing (QE) & Tightening (QT) QE: Central bank injects liquidity by purchasing assets during crises QT: Withdrawal of excess liquidity when inflation is high QE is often used during recessions or financial crises. 5. How Central Bank Policies Affect the Economy a) Inflation Control When inflation rises above target levels, central banks: Increase interest rates Reduce liquidity Discourage excessive borrowing When inflation is low, they do the opposite to boost demand. b) Economic Growth Loose monetary policy: Encourages consumption Boosts business investment Supports stock markets Tight monetary policy: Slows growth Reduces speculative bubbles Stabilizes the economy c) Impact on Financial Markets Equity Markets: Prefer low interest rates Bond Markets: Prices fall when rates rise Currency Markets: Higher rates attract foreign capital Commodity Markets: Inflation and liquidity influence prices Market volatility often increases around central bank policy announcements. 6. Transmission Mechanism of Monetary Policy The transmission mechanism explains how policy changes affect the real economy: Policy rate change Bank lending rates adjust Borrowing & spending behavior changes Investment & consumption respond Inflation and growth adjust This process takes time and varies across economies. 7. Coordination with Fiscal Policy Fiscal policy (government spending and taxation) works alongside monetary policy. Expansionary fiscal + loose monetary policy → strong stimulus Tight fiscal + tight monetary policy → economic slowdown Effective coordination ensures macroeconomic stability. 8. Challenges Faced by Central Banks Balancing inflation control and growth Managing global shocks (oil prices, wars, pandemics) Controlling asset bubbles Maintaining policy credibility Dealing with time lags in policy impact Central banks must make decisions based on imperfect and evolving data. 9. Importance for Traders and Investors For traders and investors: Macroeconomic data releases create volatility Interest rate cycles define long-term market trends Central bank guidance (forward guidance) influences expectations Currency and bond markets react first to policy changes Successful market participants track macro indicators alongside technical and fundamental analysis. Conclusion Macroeconomic indicators provide a snapshot of economic health, while central bank policies act as the control system guiding growth, inflation, and financial stability. Together, they influence interest rates, currency values, business cycles, and asset prices. Understanding this relationship is essential for policymakers, investors, and traders alike, as it helps anticipate economic trends and make informed decisions in an interconnected global economy.
NSE:NIFTYEducation
by GlobalWolfStreet
Interest Rates and Central Bank PolicyIntroduction Interest rates are a cornerstone of modern economies, influencing borrowing, spending, saving, and investment behavior across households, businesses, and governments. They represent the cost of borrowing money or the return for lending it. Central banks—such as the Federal Reserve in the United States, the Reserve Bank of India, or the European Central Bank—play a critical role in determining the level of interest rates through monetary policy. By influencing interest rates, central banks aim to achieve macroeconomic objectives, including price stability, full employment, and sustainable economic growth. Understanding how interest rates work and how central bank policies shape them is fundamental for investors, businesses, and policymakers alike. Understanding Interest Rates 1. Types of Interest Rates Interest rates can take several forms, each with specific functions in the economy: Policy or Benchmark Rates: These are set by central banks and serve as a reference for other interest rates in the economy. For example, the federal funds rate in the U.S. or the repo rate in India. Market Rates: These are determined by supply and demand in financial markets. Examples include interbank lending rates and bond yields. Consumer Rates: These affect individuals directly, including mortgage rates, personal loans, and credit card interest rates. Corporate Rates: Businesses borrow at rates that reflect risk, collateral, and creditworthiness, influenced by policy and market rates. 2. Nominal vs Real Interest Rates Nominal Interest Rate: The stated rate without adjusting for inflation. Real Interest Rate: Nominal rate minus inflation. Real rates measure the true cost of borrowing or the real return on savings and investment. 3. Influence on Economic Behavior Interest rates affect the economy in multiple ways: Consumption: Lower interest rates reduce the cost of loans, encouraging consumers to borrow and spend. Higher rates do the opposite. Investment: Businesses are more likely to invest in capital projects when borrowing costs are low. High rates may delay expansion. Saving: Higher interest rates incentivize saving, while lower rates encourage spending. Currency Value: Higher domestic interest rates can attract foreign capital, strengthening the currency. Conversely, lower rates may weaken the currency. Central Bank Policy Central banks are responsible for managing a country’s monetary system. Their primary tools and objectives are designed to maintain economic stability, control inflation, and support growth. 1. Objectives of Central Bank Policy Price Stability: Controlling inflation is the primary goal of most central banks. Moderate and predictable inflation supports economic confidence. Economic Growth and Employment: By adjusting interest rates and money supply, central banks aim to promote sustainable growth and reduce unemployment. Financial Stability: Preventing financial crises through regulation, liquidity provision, and supervision of banks and financial institutions. Currency Stability: Maintaining the value of the domestic currency in international markets, often tied to trade and capital flows. 2. Tools of Monetary Policy Central banks use a combination of conventional and unconventional tools: Policy Rates: Repo Rate (Repurchase Rate): The rate at which commercial banks borrow short-term funds from the central bank. Lower repo rates encourage lending and spending; higher rates curb inflation. Reverse Repo Rate: The rate at which banks park excess funds with the central bank. Used to control liquidity. Discount Rate / Federal Funds Rate: Key U.S. benchmark, influencing borrowing costs across the economy. Open Market Operations (OMO): Central banks buy or sell government securities to influence the money supply. Buying securities injects liquidity, lowering interest rates; selling withdraws liquidity, raising rates. Reserve Requirements: The minimum fraction of deposits that banks must keep as reserves. Lowering reserve requirements increases lending capacity; raising them restricts credit. Forward Guidance: Communicating future monetary policy intentions to influence expectations and market behavior. Quantitative Easing (QE): Unconventional policy used during crises, where central banks purchase large amounts of government or corporate bonds to lower long-term interest rates and stimulate borrowing. Interest Rate Transmission Mechanism The transmission of central bank policy through the economy involves several channels: Bank Lending Channel: Lower policy rates reduce banks’ funding costs, encouraging more loans to businesses and households. Asset Price Channel: Lower rates raise stock and bond prices, boosting wealth and consumption. Exchange Rate Channel: Lower rates may depreciate the currency, increasing exports by making domestic goods cheaper internationally. Expectations Channel: Central bank guidance shapes public and business expectations about future inflation, spending, and investment. Types of Monetary Policy Central banks implement monetary policy based on prevailing economic conditions: Expansionary Policy: Lowering interest rates or increasing money supply to stimulate growth, typically used during recessions or slowdowns. Contractionary Policy: Raising interest rates or reducing liquidity to control inflation or an overheating economy. For example, during a recession, a central bank may cut policy rates and purchase government securities to encourage borrowing and spending. Conversely, in high inflation periods, tightening policy through higher rates reduces consumption and cooling inflation pressures. Global Implications Interest rates are not only domestic policy tools; they have international consequences: Capital Flows: Higher domestic rates attract foreign investment, impacting exchange rates and balance of payments. Global Borrowing Costs: Countries with debt denominated in foreign currencies are affected by rate changes in major economies like the U.S. Commodity Prices: Changes in rates affect commodity prices indirectly by altering demand and currency values. Financial Markets: Equity and bond markets react sensitively to central bank announcements, often leading to volatility around policy decisions. Challenges and Considerations Central banks face numerous challenges in setting interest rates: Inflation vs Growth Trade-Off: Aggressive rate hikes control inflation but may slow growth; low rates boost growth but risk higher inflation. Lagged Effects: Monetary policy effects take time to permeate the economy, sometimes 6–18 months. Global Integration: International capital flows and foreign monetary policies constrain domestic policy autonomy. Expectations Management: Public confidence in central bank credibility is crucial. Poor communication can lead to volatility in markets and consumer behavior. Recent Trends In the past decade, central banks have faced low-interest-rate environments post-global financial crises, requiring unconventional measures like QE and forward guidance. Inflation surges following supply chain disruptions and geopolitical tensions have prompted rapid interest rate adjustments, demonstrating the dynamic interplay between policy and economic realities. Conclusion Interest rates and central bank policies are vital levers for guiding economic activity. They affect borrowing, spending, saving, investment, and currency values, influencing both domestic and global economic landscapes. By using tools like policy rates, open market operations, and unconventional interventions, central banks seek to balance growth, employment, and inflation. Understanding these mechanisms helps investors, businesses, and individuals make informed decisions, as interest rates ultimately shape the rhythm of economic life. Effective central bank policy requires not only technical skill but also careful attention to timing, communication, and the broader global context. With economies increasingly interconnected, the ripple effects of interest rate decisions extend far beyond national borders, making central bank actions a focal point for both policymakers and markets worldwide.
NSE:BANKNIFTYEducation
by GlobalWolfStreet
Gold (XAUUSD) Going Parabolic ?The chart suggests that Gold (XAUUSD) has been rising steadily in the past year. Gold in general acts as hedge against inflation and uncertainty. There can be further upthrust due to some catalyst. In general one should not short a parabolic move prematurely as it can keep moving upwards. Only with defined signals one must try that. Shorting in general is very difficult. Nevertheless if one wants to trade a parabolic move, they can long it with a small position so that the risk reward is great. Commit only that much which you are ready to lose with appropriate stop loss. What effects the price of Gold in general - 1. Geopolitical events - e.g. Ukraine War Gaza War Tariff Wars 2. Dollar Index - Post election DXY rose steadily causing selloff in emerging markets. Though Gold fell initially but it steadied and started moving upwards later. Since gold correlates negatively in general with DXY, it's important to keep a tab on it. 3. Demand and supply of physical gold. Buying and selling by Central Banks around the world Mining output Demand by consumers 4. Monetary policies of Central Banks of USA, China, Japan etc 5. Trading in derivatives PS - This is not an exhaustive list of course. So in order to understand and speculate on Gold one must have an updated macro view and chart reading capacity. Trade Safe
OANDA:XAUUSDLong
by HeLLBoY_DEagle
Gold bounces off resistance-turned-support, Jackson Hole eyedGold prices have ended a two-day drop as traders look ahead to the key Jackson Hole Symposium in Wyoming, where a speech by Federal Reserve Chairman Jerome Powell is highly anticipated. Gold has bounced back from its recent low, rebounding off the 10-day Exponential Moving Average (EMA) and a key previous resistance line. Positive signals from the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) suggest that gold could push past the $2,520 mark comprising the 50% Fibonacci Extension (FE) of its February-June move. Following that, the buyers can aim for $2,575 and potentially $2,600. On the downside, gold is supported by the 10-day EMA around $2,482 and a former resistance level now acting as support near $2,474. If gold drops below these levels, it could test the $2,465 mark and the 50-day EMA at $2,415. A further decline past $2,415 would need to break through a support line of around $2,410 and the $2,400 level to shift control to sellers. In summary, gold is on a positive path, but there are hurdles ahead before it can make significant gains.
OANDA:XAUUSD
by MTradingGlobal
Crude Oil rebounds toward 200-SMA as the key week beginsWTI Crude Oil posts more than 1.0% intraday gain early Monday, after declining in the last three consecutive weeks, as energy traders brace for a rollercoaster week comprising multiple central bank announcements and top-tier data. In doing so, the black gold takes clues from a nearly oversold RSI (14) amid cautious optimism in the market. However, bearish MACD signals and the quote’s sustained trading beneath the 200-SMA keep the oil sellers hopeful of visiting the 61.8% Fibonacci retracement of its December 2023 to April 2024 upside, near $75.30. Following that, a seven-month-old upward-sloping support line surrounding $74.40 will be a crucial level for the bears to conquer to keep the reins. In a case where the commodity prices remain bearish past $74.40, it becomes vulnerable to drop toward the previous monthly low of around $72.40. Alternatively, the WTI Crude Oil buyers’ ability to provide a daily close beyond the 200-SMA hurdle of $78.40 won’t give them the throne as a downward-sloping resistance line from early July, close to $79.50, will challenge further advances. Also restricting the commodity’s run-up is the $80.00 threshold and a two-month-old horizontal resistance region near $80.30-60. If the energy benchmark manages to remain strong past $80.60, the 23.6% Fibonacci ratio of around $83.00 and the monthly high of $84.50 will lure the bulls. Overall, the market’s consolidation allows WTI crude Oil to lick its wounds but the bullish trend is far from the reach.
TVC:USOIL
by MTradingGlobal
Central Bank Breakout analysis to buyCentral Bank of India is a commercial bank. The Bank's segments include Treasury Operations, Corporate/Wholesale Banking, Retail Banking and other Banking business. The Treasury Operations segment includes dealing in government and other securities, money market operations and Forex operations. If we look at the chart: The market has broken multiple bullish pattern confirmations. It has a broken Sideways Range, Head and shoulder, while having a very strong volume at the breakout. If we look at the RSI, its crossing 60 to the upside can be a good sign of long-term bullish for the stock. Investors of short term traders can proceed with the stock as follows: you can execute the trade with R:R of 1:2. Plan of Action: Buy: above 69.40 Stop loss: 66 Target1: 75.75
NSE:CENTRALBKLong
by finnova_
100-SMA prods GBPUSD bears on BoE Super ThursdayGBPUSD stays defensive at the lowest level in a week, snapping a two-day losing streak, as the pair traders await the Bank of England’s (BoE) Monetary Policy Announcements, as well as the quarterly monetary policy report that makes the day a “Super Thursday”. It’s worth noting that the 100-SMA puts a short-term trading floor under the prices near 1.2480, especially amid the downbeat RSI suggesting a pause in the previous fall. However, the bearish MACD signals and the quote’s sustained downside break of a two-week-old support line, now immediate resistance surrounding 1.2515, and clear trading beneath a downward-sloping trend line resistance stretched since mid-March, at 1.2585 at the latest, keeps the sellers hopeful. Even if the Pound Sterling gains support from the BoE and rises past 1.2585, the monthly high of 1.2634 will be the last defense of the bears before giving control to the bulls. Meanwhile, a downside break of the 100-SMA support of 1.2480, as well as the BoE’s inability to convince the GBPUSD bulls, will resume a south run targeting the 1.2400 threshold. In a case where the Cable bears keep the reins past 1.2400, the yearly bottom marked in April surrounding 1.2300 and the 61.8% Fibonacci Extension (FE) of the quote’s March-May moves, near 1.2265, will be in the spotlight ahead of the late 2023 bottom of near 1.2067. Overall, the GBPUSD pair remains in a bearish trend on the BoE Super Thursday despite the latest consolidation. Hence, even a surprise rebound should not be considered a bullish sign.
by MTradingGlobal
Short Term Swing Trading Idea in Central Bank for 20% UpsideHi, NSE:CENTRALBK has given a Bullish Inverted Head & Shoulder Breakout on Daily charts with very good volume. MACD is also on the bullish side on Daily and Monthly time frames. RSI is also on the bullish side on daily, weekly and monthly time frames. In the current market scenario, I am expecting that the bullish momentum will continue. Complete price projection like entry, stop loss and targets mentioned on the charts for educational purpose. Don't Forget to Follow me to get all the updates. Please share your feedback or any queries on the study. Disclaimer: Please consult your financial advisor before making any investment decision.
NSE:CENTRALBK
by raigvivek
AUDUSD portrays “fakeout” on RBA’s status quoOn Tuesday, the Reserve Bank of Australia (RBA) kept its monetary policy unchanged, as expected, and dragged the AUDUSD pair back from an intraday high. With this, the Aussie pair defies Friday’s breakout of a four-month-old descending resistance line, terming it the “false breakout” or “fakeout”. In addition to the fakeout, the RSI’s retreat from the overbought territory and an impending bear cross on the MACD also tease the sellers. However, a clear downside break of the aforementioned resistance-turned-support line surrounding 0.6600 and RBA Governor Michele Bullock's dovish remarks are needed for the bears to retake control. In that case, the pair’s quick fall toward 0.6570 and the 200-bar Exponential Moving Average (EMA) level near 0.6530 can’t be ruled out. It’s worth mentioning that the seller’s dominance past 0.6530 depends on the ability to break a three-week-old rising support line, close to 0.6515 at the latest. Meanwhile, an area comprising multiple levels marked since early January, near 0.6645-40, guards the immediate upside of the AUDUSD pair. Following that, March’s peak of 0.6667 and the 0.6700 threshold will challenge the buyers. If the Aussie pair remains firmer beyond the 0.6700 hurdle, 0.6730, 0.6780 and the 0.6800 round figure could test the upside momentum before directing the bulls toward the late 2023 high of 0.6871. Overall, the AUDUSD pair signals a pullback price move, but the bearish momentum will likely remain tepid unless fundamental support is gained.
by MTradingGlobal
Gold grinds within $15 trading range as Fed decision loomsGold price licks its wounds around the mid-$2,100s while portraying a choppy move between the one-week-old descending resistance line and $2,148 support confluence comprising the 10-day Exponential Moving Average (EMA) and the previous yearly high. In doing so, the XAUUSD depicts the market’s cautious mood ahead of the all-important monetary policy decision from the US Federal Reserve (Fed) while consolidating the previous weekly loss, the first in four. It’s worth noting that the overbought RSI (14) line and an impending bear cross on the MACD favor downside bias for the precious metal. In that case, a daily closing beneath $2,148 becomes necessary for the sellers to retake control. Following that, the late December 2023 peak of around $2,090 will be a quick favorite for the bears before the tops marked during early 2024 around $2,065. It’s worth noting that the $2,100 round figure also acts as a downside filter for the bullion. On the flip side, a daily closing beyond the one-week-old descending resistance line surrounding $2,163 could quickly propel the Gold price toward the recent all-time high of near $2,195. Should the quote remain firmer past $2,195, the $2,200 round figure will challenge the XAUUSD bulls. It should be observed that an upward-sloping resistance line from May 2023 also highlights the $2,200 threshold as an important hurdle toward the north. Overall, the Gold price is likely to depict a downside move unless the US Federal Reserve (Fed) disappoints the US Dollar bulls by resisting the hawkish performance.
OANDA:XAUUSD
by MTradingGlobal
EURUSD flirts with 1.0880-75 key support as Fed week beginsEURUSD remains pressured around 1.0890 early Monday, after posting the first weekly loss in four. In doing so, the Euro pair grinds near the 1.0880-75 support confluence comprising the 100-SMA and a five-week-old rising trend line amid the initial hours of the week comprising the key Federal Open Market Committee (FOMC) monetary policy meeting. It’s worth noting that an impending bull cross on the MACD and a below 30 level of RSI (14) suggest the pre-FOMC consolidation of the quote. However, the corrective bounce appears elusive unless buyers manage to cross a downward-sloping trend line from the monthly high, close to 1.0945 at the latest. Even so, the monthly top surrounding 1.0980 and the 1.1000 threshold will act as the final defense of the sellers. Meanwhile, a downside break of the 1.0880-75 key support will allow the EURUSD bears to attack the 200-SMA level of 1.0830. Following that, the 1.0790-85 and the 1.0730 levels could test the sellers before directing the prices toward the yearly low marked in February near 1.0695. In a case where the Euro remains bearish past 1.0695, the May 2023 low of 1.0635 and March 2023 bottom surrounding 1.0515 will provide intermediate halts during a likely south-run targeting the previous yearly low of 1.0448. Overall, the EURUSD pair stays on the bear’s radar even if the oscillators suggest consolidation ahead of the key FOMC.
by MTradingGlobal
Gold stays range-bound ahead of US Retail Sales Gold fades the previous day’s corrective bounce off the weekly low as market players await the US Retail Sales for February. In doing so, the spot Gold price, namely the XAUUSD, seesaws within a $48 trading range comprising an ascending resistance line stretched from May 2023 and the previous yearly top. It’s worth noting that the sluggish oscillators and the pre-data anxiety suggest a continuation of the sideways range. However, the bulls appear to have run out of fuel hence sellers are likely to benefit more on a downside break of $2,148 support. In that case, a quick fall toward the $2,100 round figure will be imminent but a 3.5-month-old horizontal support zone surrounding $2,090 could challenge the XAUUSD sellers afterward. Alternatively, an upside clearance of the aforementioned multi-month-old rising resistance line, close to $2,186 could recall the Gold buyers. However, the $2,200 threshold and 78.6% Fibonacci Extension (FE) of the quote’s October-December 2023 moves, near $2,240, will challenge the XAUUSD’s upside momentum afterward. Following that, the 100% FE level of $2,313 and the $2,500 psychological magnet will be in the spotlight. Overall, Gold stays within a long-term bullish trend but the short-term view appears to favor a pullback in prices should the scheduled data allow the US Dollar to defend the first weekly gain in four.
OANDA:XAUUSD
by MTradingGlobal
AUDUSD probes month-long bearish channel on China’s returnMarket sentiment improved early Monday as China returned to trading after a week-long Lunar New Year holiday. With this, AUDUSD justifies its role as a risk barometer and cheers optimism at the biggest customer, namely China, by challenging a one-month-old bearish trend. However, the road towards the north appears long and bumpy before convincing the Aussie bulls. That said, the stated falling channel’s top line, close to 0.6555, guards the immediate run-up of the pair ahead of the 200-bar Exponential Moving Average (EMA). Following that, a horizontal area comprising multiple levels marked since early January, between 0.6620 and 0.6640, appears a tough nut to crack for the bulls before taking control. On the contrary, the AUDUSD pairs’ retreat will aim for the 0.6500 round figure before convincing the bears to target the monthly low of near 0.6440. It’s worth noting, however, that the bottom line of a one-month-long descending trend channel, close to 0.6430 at the latest, will restrict further downside of the pair. In a case where the quote remains weak past 0.6430, a slew of support levels around 0.6400, 0.6340 and 0.6320 will try pushing back the bearish moves. However, the pair’s downside past 0.6320 will make it vulnerable to slump toward the previous yearly low surrounding 0.627. Overall, AUDUSD is likely to extend the latest rebound as upbeat sentiment joins firmer MACD and RSI signals. However, the room towards the north appears limited and the upside is also dependent on the RBA and FOMC Minutes.
by MTradingGlobal
USDJPY bulls prod 200-EMA resistance after BoJ status quoUSDJPY prints a three-day uptrend while extending the previous week’s recovery from the lowest level since late July after the Bank of Japan (BoJ) defends the current monetary policy. In doing so, the Japanese central bank rules out concerns surrounding its gradual exit from the ultra-easy monetary policy amid a recent increase in inflation. With this, the Yen pair pokes the 200-EMA hurdle, extending recovery from a five-month-old horizontal support. The rebound also justifies the RSI (14) line’s U-turn from the oversold territory, which in turn suggests the quote’s further run-up beyond the key EMA surrounding 143.80. However, the bearish MACD signals and a downward-sloping resistance line from mid-November, close to 145.30 by the press time, will challenge further advances. In a case where the buyers keep reins past 145.30, the odds of witnessing a run-up towards the monthly high near 148.35 and then toward the 150.00 psychological magnet can’t be ruled out. Meanwhile, growing chatters about the US Federal Reserve’s (Fed) rate cuts in early 2024 could join the downbeat yields to weigh on the USDJPY pair, which in turn highlights the aforementioned horizontal support region of around 141.50-142.00. Should the Yen pair sellers manage to break the 141.50 support, it can quickly drop to the 140.00 psychological magnet before highlighting July’s low of 137.23 as the key support. Following that, the pair’s bearish trajectory towards the yearly bottom of 127.20 appears a favorite for the bears. Overall, USDJPY regains upside momentum but the room towards the north appears limited.
by MTradingGlobal
EURUSD stays defensive near key support line on Fed dayEURUSD fades bounce off an ascending support line stretched from early January as market players brace for the US Federal Reserve (Fed) monetary policy announcements on Wednesday. It’s worth noting, however, that the RSI (14) line is nearly oversold and the MACD flags bull cross, which in turn favors the Euro pair’s sustained trading beyond the stated support line, close to 1.0640 by the press time. That said, the quote’s weakness past 1.0640, will make it vulnerable to decline towards March’s bottom surrounding 1.0515 before testing the yearly low of around 1.0480. Alternatively, the EURUSD pair’s recovery moves will initially aim for the 61.8% Fibonacci retracement of January-July upside, near 1.0790. However, a two-month-old descending resistance line and the 200-day SMA, respectively near 1.0815 and 1.0830, could challenge the Euro buyers past 1.0790. In a case where the pair manages to remain firmer past 1.0790, as well as cross the 1.0800 round figure, the odds of witnessing a run-up towards the late August swing high of around 1.0940 can’t be ruled out. Overall, EURUSD remains bearish even if the oscillators challenge the downside bias.
by MTradingGlobal
USDJPY edges higher within multi-month-old bullish channelUSDJPY defends a two-week uptrend within an ascending trend channel established since early March. In doing so, the Yen pair stays near an upper limit of the stated channel, recently wobbling between the 21-day SMA and a one-month-long resistance line. It’s worth noting that the RSI (14) line suggests the bullish exhaustion while the MACD also lacks directional momentum and hence a pullback towards the 21-day SMA level of around 146.55 appears imminent. Adding strength to the stated SMA support is the 78.6% Fibonacci retracement of the October 2022 to January 2023 downturn. In a case where the Yen pair drops below 146.55, July’s peak of 144.90 and the 61.8% Fibonacci retracement level of 142.55 can test the bears before allowing them to challenge the key supports, namely the 100-day SMA and the aforementioned channel’s bottom line which are around 141.80 and 141.40 respectively. Meanwhile, an ascending trend line from mid-August, close to 148.80, guards immediate recovery of the USDJPY pair ahead of the bullish channel’s top line, close to 149.80 at the latest. Following that, the 150.00 psychological magnet and 150.30 levels may test the Yen pair buyers. In a case where the risk-barometer pair stays firmer past 150.30, the odds of witnessing a run-up towards challenging the previous yearly peak of around 152.00 can’t be ruled out. To sum up, USDJPY buyers keep the reins at the start of the Fed week, even as Japan’s national holiday and sluggish upside momentum prod the bulls of late.
by MTradingGlobal