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AUD/USD Risk Proximity and Volatility:What Traders Need to KnowAUD/USD Takes a Leg Higher in Early Asian Trading: A Look at the Factors Driving Risk Appetite In early Asian trading, AUD/USD saw a surge in risk proximity, hitting the 0.6730 mark before retracing and trading unchanged. This movement was accompanied by a broader expansion of risk appetite, particularly in high beta currencies, thanks to coordinated efforts from major central banks aimed at addressing liquidity concerns. In this article, we will take a closer look at the factors driving this movement in AUD/USD, and what traders can expect in the near future. Factors Driving AUD/USD Risk Proximity Central Bank Coordination The main factor driving the surge in risk proximity for AUD/USD was the coordinated action taken by major central banks to address the liquidity crunch in financial markets. This included the US Federal Reserve, the Bank of Japan, the Bank of England, the European Central Bank, and the Swiss National Bank, who all agreed to provide dollar liquidity to their respective banking systems. This helped to ease concerns about liquidity and increase investor confidence, driving risk appetite and boosting high beta currencies like the Australian dollar. Economic Data Another factor driving risk proximity for AUD/USD is the release of positive economic data, particularly from China, which is Australia's largest trading partner. This data included a better-than-expected reading for the Caixin Manufacturing PMI, which showed a rise to 51.7 in December from 51.8 in November. This suggests that China's manufacturing sector is expanding at a faster pace, which bodes well for Australia's export-oriented economy. US Political Uncertainty US political uncertainty has also been a factor driving risk proximity for AUD/USD, with the ongoing impeachment proceedings against President Trump contributing to a general sense of unease in the markets. This has led some investors to seek out safe-haven assets, like gold, which has seen a surge in value in recent weeks. However, the coordinated action by central banks to address liquidity concerns has helped to mitigate the impact of this uncertainty on AUD/USD. Trade Tensions Finally, ongoing trade tensions between the US and China have also been a factor driving risk proximity for AUD/USD, as Australia is heavily dependent on Chinese demand for its exports. However, recent signs of progress in trade negotiations between the two countries, including the signing of a phase one trade deal, have helped to ease concerns and boost investor confidence. What Traders Can Expect in the Near Future Looking ahead, traders can expect continued volatility in AUD/USD, as the factors driving risk proximity are likely to remain in play for the foreseeable future. Ongoing trade tensions and political uncertainty in the US could continue to weigh on the markets, while positive economic data from China and central bank action to address liquidity concerns could help to support risk appetite and boost high beta currencies like the Australian dollar. Conclusion In summary, the surge in risk proximity for AUD/USD in early Asian trading was driven by a combination of factors, including central bank coordination, positive economic data, US political uncertainty, and ongoing trade tensions. Traders can expect continued volatility in the near future, as these factors are likely to remain in play. However, the coordinated action by major central banks to address liquidity concerns has helped to mitigate the impact of these factors on AUD/USD.
Short
by FOREXN1
3
BITCOIN:FUNDAMENTAL ANALYSIS + TECHNICAL ANALYSISHello there! If you're a fan of blockchain-based tokens and are considering investing in cryptocurrencies, you might want to consider purchasing the "progenitor" of cryptocurrencies, Bitcoin. Although cryptocurrencies are generally known for their volatility, investing in an expensive token like Bitcoin can somewhat reduce that volatility compared to low-cost cryptocurrencies like Ripple and Cardano, which tend to move more quickly. It's important to note that even though Bitcoin is a five-figure token, it's not incapable of skyrocketing. In fact, under the right conditions, it can provide the perfect combination of stability and explosive growth. While critics have predicted Bitcoin's demise every time it has collapsed since its inception in 2009, it has always fully recovered, and a full recovery to its previous peak of $69,000 would represent a 3-fold step. Critics of cryptocurrency like to say, "It's different this time," but Bitcoin's impeccable track record of fully recovering from at least half a dozen crashes puts the burden of proof on the bears until proven otherwise. So why did Bitcoin collapse this time around? Concerns about increased regulation of cryptocurrencies and the issue of legitimacy are certainly part of the bigger picture, but the main factor contributing to its fall, which began in late 2021, was undoubtedly the market's fear of rising interest rates. However, it's important to consider whether Bitcoin is really competing with government bonds like stocks of big companies are. Currently, 401(k) plans and other large investment funds consist primarily of stocks and bonds, and you won't see bonds competing with Bitcoin for space in these funds. If anything will be temporarily squeezed out of this list when bond yields rise sharply, it will most likely be stocks. Bitcoin's battle for legitimacy and regulatory recognition is currently being fought in the courts. Grayscale has sued the Securities and Exchange Commission (SEC), claiming that the regulator unfairly rejected its application to convert its Grayscale Bitcoin Trust fund into a full-fledged spot Bitcoin ETF. Grayscale claims that approved Bitcoin futures ETFs already exist, and it's not being consistent or impartial. Bitcoin is too big and influential to ignore; its market value has already surpassed that of Visa and Mastercard. At this point, regulators must be quick to check and slow to embrace new technology, especially when it disrupts the status quo. While there's no guarantee that a legal Bitcoin ETF will appear in the near future, if and when it finally does, it could open up convenient and affordable access to the world of cryptocurrency to the masses. The creation of Bitcoin-based investment vehicles available through popular stock brokers, 401(k) plans, and investment advisors should be a watershed moment. So, feel free to consider taking a moderately large position in Bitcoin before that spaceship leaves the launch pad. Bitcoin's past propensity for a dynamic recovery when it finally happens suggests the possibility - perhaps even the likelihood - of a rocketing takeoff sooner rather than later.
COINBASE:BTCUSDLong
by FOREXN1
16
EUR/USD Price May Drop Soon - SHORTAccording to the Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia from UOB Group, there is a possibility of a further decline in the EUR/USD exchange rate in the near future. In their recent analysis, they highlighted that the EUR could weaken further but a clear break of 1.0500 is unlikely. Although the EUR traded mostly sideways with a brief drop to 1.0548 in London trade, the price movements appear to be consolidative, and further sideways trading is likely. Looking at the next 1-3 weeks, the strategists pointed out that the EUR has already plunged to a low of 1.0514, and while the rapid drop appears to be too fast, too soon, the risk of EUR dropping further has increased. It remains to be seen if EUR can break the major support at 1.0470. The strategists maintain their view that only a breach of the strong resistance level at 1.0680 would indicate that the downside risk has faded. Therefore, traders need to remain vigilant and watch out for any significant movements in the exchange rate in the coming days.
Short
by FOREXN1
16
GBP/CHF:Bank of England Holds Emergency Talks Over Credit SuisseAccording to a report by the Telegraph, the Bank of England has been engaged in emergency talks with international counterparts as concerns continue to escalate over the deteriorating situation at Swiss bank, Credit Suisse Group AG (CSGN.S). The bank has been experiencing significant financial struggles in recent times, leading to uncertainty and instability in the wider financial markets. As one of the largest and most influential financial institutions in Switzerland, Credit Suisse Group AG plays a significant role in the global financial system. Given the bank's current financial predicament, many experts are worried about the potential ripple effects that could be felt throughout the international financial landscape. As a result, the Bank of England has been closely monitoring the situation and working closely with other central banks and financial regulators to develop a coordinated response. The goal of these emergency talks is to identify potential risks and vulnerabilities in the global financial system and to develop appropriate measures to mitigate these risks. Overall, the situation at Credit Suisse Group AG has raised concerns about the broader health of the global financial system, and many experts are closely watching developments in the coming days and weeks to assess the potential impact on markets and the wider economy.
Long
by FOREXN1
1
USD/JPY Analysis: Bears Eye 131.00 as Bulls Await 4-Hour SupportLooking ahead, the level of 131.00 is being closely watched by USD/JPY bears, as it may come under pressure in the coming days. Bulls, on the other hand, will need to hold on to 4-hour support. Currently, USD/JPY is trading at 133.40, up from Thursday's Tokyo stock market close of 132.74. Following Credit Suisse's announcement of borrowing up to $54 billion from the Swiss National Bank to boost liquidity and investor confidence, currency markets were relatively calm on Thursday. The Yen has been trading sideways against the US Dollar, with USD/JPY near trendline resistance, as shown in the daily chart. The daily chart reveals that the market is on the bearish side of the trendline, while also being weighed down by both horizontal and dynamic trendline resistance. The price has fallen below the prior dominant bull trend and support structure, making a downside case possible. However, if the bulls break the resistance, there is a chance of a move higher to test the 135.20s in a 50% mean reversion.
Long
by FOREXN1
1
EUR/USD may continue to fall? ⤵️Let's take a look at some fundamental news regarding EUR/USD: Commerzbank's economists have reported uncertainty regarding the market reaction to the European Central Bank's (ECB) decision today. There are doubts whether the market reaction to the ECB decision will be "normal," given the current situation. The question is, what will the ECB decide today, and how will the FX market react? According to Commerzbank, the market's reaction to the Euro in the case of a 50 basis points (bps) step by the ECB is not straightforward. For a 50 bps rate step to have a EUR-positive effect today, the market must believe that such a step is appropriate. However, if FX traders perceive the situation of the European financial system as fragile, they might consider a 50 bps step to be a mistake. Consequently, they could conclude that this would require much stronger or earlier ECB rate cuts, leading to a EUR-negative effect. It is not certain whether the FX market thinks in such a manner, and perhaps it is not even likely. That said, the possibility cannot be completely ruled out. Hence, the FX market reaction to the ECB's decision remains highly uncertain. On the other hand, a 25 bps step by the ECB is expected to elicit a positive response from the Euro. However, this depends on how convincing ECB President Christine Lagarde is in assuring the market that if the financial system really does calm down, the "missing" 25 bps will be made up for. If the market is convinced of this possibility, it is more likely to respond positively to a 25 bps step. Therefore, the ECB's decision today and the market's reaction to it remain highly unpredictable. It all boils down to how well the ECB can convince the market that its decision is appropriate and necessary, given the current economic situation in Europe.
Short
by FOREXN1
30
AUD/USD remains in bearish channel with AB=CD pattern forming ⤵️As described in our previous ideas, the AUD/USD is still inside a bearish channel, where the dynamic trend line has worked as support to prevent the price from correcting. In the last session, our attention was focused on the formation of an AB=CD pattern, which sees the Target D at the price of 0.6500 before a new correction. The C point of the pattern had a pullback on the 61.8% Fibonacci level, and our idea and analysis remain with the short setup bias. Thank you.
Short
by FOREXN1
11
USD/CAD:Oil Weakness and Financial Turmoil Shake Markets ⤴️On Wednesday, the USD/CAD experienced a wild ride due to renewed pressure on oil prices, which weakened the Canadian Dollar and sent the pair to the 1.3800 level. The price pressure on oil started with rumors swirling around Credit Suisse bank, which was seen as a potential victim of the fallout from Silicon Valley Bank's financial crisis. This led to some perceived threats attributed to Credit Suisse that could have been tangled up with SVB's situation, causing panic among investors. While all allegations against Credit Suisse's CEO have been denied, the Swiss banking regulator intervened and promised to provide liquidity solutions if needed, which did little to calm markets. The situation triggered a fresh wave of sell-offs among risky assets, with oil prices taking the biggest hit. West Texas Intermediate (WTI) fell below the $70 mark as investors started to worry about surging borrowing costs and the potential cracks in financial systems. The corrective downturn in oil prices that began earlier this week has given a boost to USD/CAD, but falling US Treasury yields are keeping a lid on any appreciation in the US Dollar. The pair is mainly being driven by oil prices, rather than any other factor, as the Bank of Canada has paused its rate hiking cycle. Meanwhile, the US released its Retail Sales figures and Producer Price Index (PPI) data for February on Wednesday. The Retail Sales figures were downbeat, with a MoM reading of -0.4% compared to the previous month's 3.2%, and a Control Group reading of 0.5% compared to the previous 2.3%. However, there were some signs of relief in the PPI data, with a MoM reading of -0.1% from the prior 0.3%, and a YoY reading of 4.6% from the prior 5.7%. Overall, the financial turmoil triggered by rumors surrounding Credit Suisse and concerns over oil prices has sent shockwaves through markets, causing investors to worry about the potential impact on global financial systems.
Long
by FOREXN1
3
NZD/USD Struggles Amid Concerns Over New Zealand's Q4 GDP ⤵️Despite a recent uptick in the value of the Kiwi currency, the NZD/USD pair is struggling to overcome intraday losses. The weaker-than-expected Q4 GDP figures from New Zealand have raised concerns about a potential credit rating cut for the country. The recent troubles faced by major banks in the US and Europe have also sparked fears of a return to the 2008 financial crisis, which has had a negative impact on riskier assets like the Antipodeans. Traders are keeping an eye on Goldman Sachs’ economic outlook and China’s threat to European shares as they navigate a sluggish market session. Despite a slight recovery in intraday losses, the NZD/USD pair remains depressed near 0.6160, down for the second consecutive day. The downbeat Q4 GDP figures from New Zealand have weighed heavily on the Kiwi pair, with YoY figures also falling short of expectations. Concerns about New Zealand’s credit rating have been raised due to the nation's current account deficit remaining too large. Meanwhile, the latest bank fallouts in the US and Europe, including Credit Suisse, have heightened fears of another financial crisis. On the positive side, news that Credit Suisse is seeking to borrow up to CHF50 billion from the Swiss National Bank to strengthen liquidity has eased fears somewhat. Anonymous sources have also suggested that US banks are less vulnerable to the Credit Suisse debacle. Furthermore, emergency talks by the Bank of England and market chatter suggesting no immediate negative reaction from the Federal Reserve and ECB during their monetary policy meetings have helped to calm risk aversion. Looking ahead, traders will be watching for any major movements in the bond market and any further developments regarding the bank fallouts. Second-tier US data about employment, manufacturing, and housing activities may also have an impact on the NZD/USD pair.
Short
by FOREXN1
1
AUD/USD: FIBO Levels and Stochastic Divergence for SHORT ImpulseYesterday, as previously discussed, the price within a Bearish trend experienced a pullback on the dynamic resistance, coinciding with the Fibonacci level area between 50% and 61.8%. This resulted in a potential downward impulse for the price. Furthermore, it is important to note the existence of a Divergence on the Stochastic indicator, which indicates an overbought situation. Considering these factors, it is our professional opinion that a short impulse continuation in the direction of the main trend is likely to occur. As such, it would be prudent for traders to carefully monitor these developments and position themselves accordingly.
Short
by FOREXN1
8
USD/JPY:Pullback 50% Fibo Level For A new LONG Setup USD/JPY bounces back from a one-month low and holds onto slight gains around 133.70, as it snaps a three-day downtrend. The pair benefits from market consolidation following the recent US actions to tame fears arising from Silicon Valley Bank (SVB) and Signature Bank fallout. Additionally, the recent recovery in US Treasury bond yields after the previous day’s bond market turmoil adds strength to the pair's rebound. Although the US 10-year Treasury bond yields fluctuate around 3.56%, after bouncing off the monthly low of 3.418%, the two-year counterpart rebounds from the lowest levels since September 2022 and prints mild gains of about 4.05% at the time of writing. It is worth noting that heavy bond buying was witnessed the previous day, following joint actions taken by US banking regulators to control the risks emanating from SVB and Signature Bank. While policymakers from the UK, Europe, and some Asia-Pacific majors have ruled out the likelihood of a financial crisis at home after the SVB saga, receding hawkish Fed bets and downbeat US inflation expectations have challenged USD/JPY buyers, amidst US-China tensions and the ongoing SVB talks.
Long
by FOREXN1
20
GOLD prices declined slightly after reaching new high of $1,915Yesterday the gold has continued to grow over the 61.8% Fibonacci level without seeing a rebound in that area, but today the price, after reaching the 1915 area, seems ready to have a short impulse to come back inside the bearish channel . Despite hitting a fresh monthly high around $1,915 the price of gold has slightly declined on the day, primarily due to falling US Treasury bond yields. Gold is well-known for its inverse correlation with US Treasury (UST) bond yields, but its correlation with real UST bond yields is stronger than with nominal yields. Recently, the fallout of Silicon Valley Bank (SVB) and speculation surrounding the deteriorating US financial system have caused market participants to scale back bets on an aggressive rate-hiking path from the Federal Reserve (Fed). As a result, UST yields have been decreasing upon dwindling expectations of a 50 basis point rate hike from the Fed at the March 22 meeting. Investors are likely to remain indecisive until the Fed provides more clarity on the spread of the contagion in the US banking sector. Many market forecasters have shifted their view on the Fed's rate-hiking plan, with no consensus view for the March FOMC meeting. One argument in favor of the Fed's rate-hiking cycles is their urgency to "do whatever it takes" to control inflation. However, the Fed cannot continue to hike rates while underlying issues in the financial system persist. The US economic calendar features the US Consumer Price Index (CPI) data for February, with attention focusing on the sticky service-led inflationary portion, which is the Fed's focus. If the inflation reading comes in higher than expected, the Fed will face a difficult situation as the service sector is essential to most developed economies and service-led inflation tends to be irreversible.
OANDA:XAUUSDShort
by FOREXN1
1
GBP/USD bounces off daily low post-UK jobs data - SHORTGBP/USD is drawing some dip-buying interest, but the lack of strong follow-through on the intraday uptick is notable. Despite mixed UK jobs data, the British Pound receives some support as it fails to push back against Bank of England (BoE) rate hike expectations. However, the pair faces resistance as the USD demand revives with rebounding US bond yields. Following the release of UK monthly employment data, GBP/USD has modestly recovered from intraday losses and climbed to the upper end of its daily range during the early European session on Tuesday. Despite this, the spot prices remain below the one-month high of 1.2200 reached on Monday. The Office for National Statistics reports that the number of people claiming unemployment-related benefits has decreased by 11.2K in February, slightly below the anticipated 12.4K. The previous month's reading has also been revised to a fall of 30.3K in the Claimant Count Change, from the originally estimated 12.9K. Additionally, the jobless rate has held steady at 3.7% during the three months to January, instead of the expected slight increase to 3.8%. These figures, to a larger extent, offset the slowdown in UK wage growth data and do not push back against the market's bets for additional rate hikes by the BoE later this month, lending some support to the British Pound. However, the USD demand is impeding the GBP/USD pair's upside momentum as the US bond yields recover. The increase in US bond yields is a result of the US authorities' move to limit the fallout from Silicon Valley Bank's (SNB) collapse and is also attributable to some repositioning trades ahead of the US consumer inflation figures. Nevertheless, the expectation that the US central bank will slow or even halt its interest rate-hiking cycle due to the strain on the US banking system could limit any meaningful upside for the US bond yields and restrain the USD bulls from placing aggressive bets. Traders are likely to remain cautious and await the release of the crucial US CPI report scheduled for the early North American session. This week's US economic docket also features the Producer Price Index (PPI) and monthly Retail Sales figures on Wednesday, which should influence the USD price dynamics and provide some impetus to the GBP/USD pair. However, the focus will remain on next week's key central bank event risks - the outcome of a two-day FOMC meeting on Wednesday, followed by the BoE policy decision on Thursday.
Short
by FOREXN1
3
AUD/USD is sliding down from the 0.6700 level. Waiting US CPIAhead of the US CPI release, AUD/USD remains cautious with a downside bias intact. The Fed's next move for a rate hike plan is uncertain, and market forecasters are no longer expecting a significant rate hike. During the early Asian session, AUD/USD is trading flat after reaching 0.6700 in the previous session. The US Dollar Index (DXY) is soft, and the market is anticipating the release of the US Consumer Price Index (CPI) on Tuesday. Despite the backstop provided by the Fed and US Treasury, AUD/USD has not gained much ground. The Fed unveiled a backstop plan on Sunday to counteract any damage to the US banking system caused by Silicon Valley Bank's fallout, which resulted in a relatively mild risk-on environment during the NY session on Monday. With the recent events, the market is proceeding with caution ahead of the US CPI data release. Key market forecasters are revising their expectations for a 50 basis points Fed rate hike on March 22. The banking system is struggling with non-performing assets due to the pressure of higher borrowing costs, which is particularly problematic for high-leverage businesses such as tech companies. A consistently rising interest rate would exacerbate the issue. Furthermore, elevated inflation levels are creating a double whammy for central banks, placing them in a tricky position. The upcoming US CPI data will be interesting to watch as it adds further complexity for the Federal Reserve.
Short
by FOREXN1
2
GOLD:1890 -1900 Area FIBO Area Resistance - Possible Reversal ?Over the past four days, XAU/USD has been experiencing a notable surge and is currently up by around 1%. This rise in gold price can be attributed to the decreasing US Treasury yields, which are causing the market to be on high alert for any indication of a 50 basis points rate hike during the upcoming March FOMC Meeting. Earlier in the Asian session, XAU/USD received a boost from the weaker US Dollar following the intervention of the Federal Reserve (Fed) and the US Treasury to rescue banks such as Silicon Valley Bank (SVB) and Signature Bank. However, the recent rise in borrowing costs throughout the US is putting a strain on financial health, resulting in the market facing the fallout from the SVB incident. Due to its inverse correlation with US Treasury yields, Gold is highly sensitive to fluctuations in the yield curve's shorter end. The significant drop in yields that occurred last Friday, after the Nonfarm Payrolls (NFP) report, has been putting substantial downward pressure on the US Dollar and global equity markets. In the coming days, the US economic calendar will feature the release of the Consumer Price Index (CPI) data on Tuesday. However, the market is already apprehensive ahead of the event, and the Fed's blackout period, which began recently, is further adding to the market's fragile dynamics. Therefore, it is likely that such sensitivity will continue until the March 22 FOMC Meeting. Today the GOLD is approaching the 1890.000/1900 area where the Fibonacci levels of 50% and 61.8% in confluence with the resistance area may give a turning point for the price to come back in the bearish direction. This area will be crucial to understanding if the price will continue to grow or if a reversal will happen
OANDA:XAUUSDShort
by FOREXN1
8
AUD/USD: Dwindling bets for a drop to 0.6500 – UOBHold on to your seats folks! AUD/USD bulls are ecstatic as they celebrate the largest daily gains seen since early February, hovering around the 0.6665-70 hurdle during the early hours of Monday in Europe. However, the Aussie pair's latest inaction has been causing quite a stir in the market as traders scramble to understand what's happening. Could this be linked to its struggle to overcome the five-week-old descending resistance line? And what's with the broadly risk-on mood and the weakened US Dollar? So many questions, so few answers! The resistance posed by the five-week-old descending resistance line has left traders perplexed and scrambling to make sense of the situation. Will the bullish momentum of the AUD/USD pair continue or is this just a fleeting moment of excitement? The ambiguity surrounding the situation is causing a great deal of uncertainty and unpredictability in the market. Adding to the burstiness of the situation is the market's overall optimistic sentiment towards risk, coupled with the weakened state of the US Dollar. What could this mean for the future of the AUD/USD pair? Will it continue to experience upward momentum or will the optimism fade away, leaving traders scratching their heads once again? In conclusion, the AUD/USD pair's recent activity has left the market in a state of perplexity and burstiness. The resistance posed by the five-week-old descending resistance line, coupled with the broadly risk-on mood and the weakened US Dollar, has traders scrambling for answers. The future of the AUD/USD pair remains uncertain, leaving traders on the edge of their seats, waiting to see what will happen next.
Short
by FOREXN1
3