In my estimation the market will likely reprice Euro into the 0740’s ultimately where larger participants will add to their already long existing buy side positions. They are already lightly scaling in again, I know where the orders are. They will fill more around 0780, again around 0750-0760, and the lower zones mentioned as well and if seen.
The result should be pricing in of a relief rally as the September rate announcement nears in stocks and risk polite currencies like Euro.
CTA is off to other things for a bit. Good luck!
The S/P 500 Strategic Commodities Index is beginning to trade under its equilibrium slightly and so when it arrives around certain areas which would coincide with Gold pricing 2470 to 2480 that is a zone I expect to see some more robust buy side activity in Gold again. (Got your back JP)
JP – regarding the FED…one has to. In similar fashion to the value of the US Dollar itself. The Dollar is backed by the confidence that the market has in future economic performance. Not Gold (there is not enough store to sustain the US economy for more than 48hrs even in war time). The FED impacts markets with their views on confidence. So the FED is viewed as both cause and effect. The problem is the accounting. When I was majoring in accounting I proved to the instructor that the books could be cooked without affecting the balance sheet during finals. I got an A on the final but was flunked for disproving actuary out of spite by the instructor lol.
That is what the FED has been doing of late.
SF 2:42 – do you count the FED meddling in the fin market and the economy as a “fundamental” element ?
JP – It is simply factual they have been keeping it out of the (published) results to cause the face value appearance of inflation being lower than it really is. The reality is some commodities will remain inflated now with new levels being established in the cost of living index. Basically the books are being cooked so that it appears inflation is cooling but it really is not, only in some parameters. Some could possibly argue it is criminal and be correct. It is like the headline employment number that does not “account” for the labor participation rate. The headline figure looks great. Until the clothes come off.
There is an old saying in sales and politics: Multiply your positives and divide your negatives. They won’t know any different than what they hear if they remain uneducated. Some remain uneducated by choice.
FWIW
bullard says …
Job market needs to normalize, not deteriorate: Fmr. Fed. Pres.
https://ca.finance.yahoo.com/video/job-market-needs-normalize-not-143107268.html
I don’t believe this morning’s US data affected Euro much other than to not shock the buy side entrants who are larger entities. The buy side was already being entertained below 0800 by more significant participants well before the data was released.
Does that mean fundamentals do not matter in trading? To think that would be pretty arrogant and pretty narrow. There is likelihood that the market will see 0880 and if there are no geopolitical or other shocks they may price in 0980. But likely not before another bout of selling toward 0780 or below, especially considering current geo-political conditions. Recent activity is highly import/export and geo-fundamental driven, not just by rate moves.
Why is that? Ask your analysts. After 5,000 words they will say “on the other hand.”
Or you can just ask your YouTube guru. They keep it simple. They know everything.
Well educated traders with common sense and more than out of the box indicators are the best traders.
GBPUSD DAILY CHART – BOUNCED OFF TRENDLINE
See this daily chart updated USING MY AMAZING TRADER CHARTING ALGO from the one I posted earlier (SCROLL BELOW) showing the key daily trandline has been tested
Bounce woud need to recover 1.2800-06 and stay above to suggest a low/pause.
I created The Amazing Trader and am still amazed when I see one of its lines, in this case a trendline, hold dead on.
A look at the day ahead in U.S. and global markets from Mike Dolan
The Federal Reserve left Wall Street with little doubt about a first U.S. interest rate cut in seven weeks’ time, but multiple cross-currents from the earnings season, Japan and China, and domestic politics all make for a noisy start to August.
USDJPY 1 HOUR CHART -THE LEVEL TO WATCH
The bLow off to 148.50 and subsequent BOUNCE back to 150 HAS WIPED THE DECK OF STOPS and suggests potential for a pause/low but only if 150 is solidly regained.
On the upside, there is a minor double to at 150.31. Key resistance is at 151.25.
In any case, 150, which has now traded 2 days in a row IS THE LEVEL TO WATCH as it will dictate what comes next.
EURUSD DAILY CHART – THE ONLY LEVEL TO WATCH
EURUSD following the weaker GBPUSD with a lag and for me, the only level to watch is 1.08 as this will set the tone going forward.
There is little on a daily chart until 1.0710.
On the upside, the failure to take out 1.0850 set the stage for a fresh run lower.
Note the blue Amazing Trader lines indicating risk on the downside as long as it stays below 1.0870
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