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Inflation

USD/JPY steady as Japanese economy contractsThe Japanese yen climbed as much as 0.85% earlier on Thursday but has pared most of those gains. USD/JPY is trading at 155.38, up 0.31% in the European session. Japan’s economy contracted in the first quarter. GDP declined by 2% y/y in the first quarter, following a revised 0% reading in Q4 2023. This was weaker than the market estimate of -15.%. On a quarterly basis, GDP declined by 0.5%, down from a revised 0% reading and just above the market estimate of -0.4%. The disappointing GDP release was a result of weak private consumption, which declined for a fourth consecutive quarter. Consumers and companies cut spending due to high inflation and sluggish wage growth. As well, exports decreased in the first quarter, as global demand remains weak. After several US inflation reports which pointed to higher inflation, April CPI reversed directions and dropped from 3.5% to 3.4%. The decline in inflation, especially in the core rate, raised expectations of a Fed rate cut and sent the yen surging 0.98% in the aftermath of the inflation report. The markets have priced in a September rate cut at 70% and a rate cut before the end of the year at 92%, according to the CME FedWatch tool. Overlooked by all the attention to the inflation report, US retail sales fell to 3% y/y in April, down sharply from a revised 3.8% in March. Monthly, retail sales were flat, compared to a revised 0.6% in March. This points to consumers cutting down on spending due to high interest rates and high inflation. USD/JPY pushed below support at 154.21 earlier and put pressure on support at 153.51 There is resistance at 155.38 and 156.08
by OANDA
1
US10Y - US Ten Year Yields WeeklySome weekly consolidation; Possible yields haven't topped yet. These inflection points lead to weekly and monthly trend changes which I will be looking for a potential spike as momentum shifts back down and rates test the keltner channel mid or upper line. There is also a possibility that rates breakout of the resistance (trend change) of this bullish leg from 2020. The Red line on the keltner channel oscillator at the bottom. I expect more black swan events to occur as chaos ramps up in the next year.
TVC:US10Y
by Mikhiavelli
CPI Index Rises over 43% per decade on Average - Don't be Fooledby the Politicians, Talking heads and Bankers. Governments can only Tax, Borrow & Spend Central Banks can only Print & Lend. If this index were to rise by the average of 43% You are looking at the CPI Index hitting 372 by Jan 2030 There is every likelihood this decade, will be a higher than average inflation rise. You must save in scarce Assets #Gold & #Bitcoin You must continue to in invest in #Technology #ETH & #LINK come to mind.
FRED:CPIAUCSLLong
by BallaJi
DXY likely go up by rise in inflationwe believe The DXY TVC:DXY will rise after inflation data. in the technical term we can see a 5-wave impulse pattern and an ABC correction after that we may see another 5-wave upward momentum. Our technical view has been shown in the chart. If you like it then Support us by Like, Following, and Sharing. Thanks For Reading Team Fortuna -RC (Disclaimer: Published ideas and other Contents on this page are for educational purposes and do not include a financial recommendation. Trading is Risky, so before any action do your research.)
ICEUS:DXYLong
by fortunamarkets
GOLD FORECASTGold New Forecast The price of XAUUSD (Gold) is expected to be volatile today due to the release of the CPI news. The movement will depend on the results: if the CPI is higher than expected, it typically indicates rising inflation, which could lead to increased interest rates and potentially cause gold prices to fall. Conversely, if the CPI is lower than expected, it suggests lower inflation, which might result in lower interest rates and potentially drive gold prices up. The price will respond accordingly to the CPI results. So, if the CPI is higher than expected, the price will try to reach 2364 & 2357 & 2344 then 2331. otherwise if the CPI is Less or equal to expectations will try to do a Bullish trend which is 2384 & 2392. and the expectations are more positive, so it will effect a bearish trend to OANDA:XAUUSD Key Levels Bullish Line: 2384, 2392. Pivot Line: 2374 Bearish Line: 2364, 2357, 2344, 2331
OANDA:XAUUSDShort
by RojBarwari
Why Large Firms with Huge Cash? Small Firm Are Leading...Berkshire Hathaway, an investment company is not investing. What is the signal? Why are they hoarding cash? • Not much good investment opportunity ahead • Preparing for tougher time E-mini S&P 500 Futures & Options Ticker: ES Minimum fluctuation: 0.25 index points = $12.50 Micro E-mini S&P 500 Futures & Options Ticker: MES Minimum fluctuation: 0.25 index points = $1.25 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CME_MINI:M2K1!
by konhow
3
Another of my masterpieces on $COPPER this time long time comingI've been meaning to revisit NYSE:HG for a while now and finally have done so; there have been some very interesting visits to black swan territory on this chart and the short term targets after breaking out from another of those green channels could really be quite high (see 20y ago) Some very notable calls in recent years: SPREADEX:NIKKEI and TVC:DJI both to 40k (over 1y in advance) CRYPTOCAP:BTC pico bottom at 15k and recent local top at 70k FX:EURUSD pico bottom & TVC:DXY pico top at 115 TVC:USOIL pico bottom at 68 NASDAQ:SMCI mega breakout at 100 NASDAQ:NVDA mega support at 120 NASDAQ:TSLA pico bottom at 105 NASDAQ:NFLX pico bottom at 165
COMEX:HG1!
by markusrafferty
What did Powell say and what did gold do? Federal Reserve Chair Jerome Powell expressed reservations about the trajectory of disinflation in the US during his recent remarks, stating, "My confidence in that is not as high as it was." Despite this, he indicated that further rate hikes were unlikely based on the data from the first quarter of the year. Powell's comments largely echoed those made during his last press conference following the Federal Reserve's previous meeting. Market sentiment regarding the Fed's rate decisions appears to be slightly adjusting though, particularly after the release of new data showing faster-than-expected increases in producer prices in April. Traders are now considering a 60% chance of a rate cut in September, down slightly from the 64% chance before Powells remarks and the Producer Price Index (PPI) report. Following the release of the PPI data, the XAU/USD pair climbed nearly 0.8% to $2,357, with potential for further gains in upcoming trading sessions. Technical analysis indicates that the next obstacle for gold prices lies near trendline resistance at $2,370, while immediate support rests close to $2,320, followed by the 50-day Moving Average. Market attention now turns to the release of consumer price data for April, scheduled for Wednesday.
BLACKBULL:XAUUSD
by BlackBull_Markets
Factors Driving Gold (XAUUSD) Prices Up Analysis: Factors Driving Gold Prices Up Here is why we think it will go up (FUNDAMENTAL ANALYSIS) Weak NFP Report and Potential Fed Rate Cuts: The recent Non-Farm Payrolls (NFP) report came in weaker than expected, signaling sluggish job growth in the United States. This unexpected weakness has raised speculation that the Federal Reserve may consider cutting interest rates to stimulate economic growth. Impact of Weak NFP Report: The NFP report provides insights into the health of the US economy, and a weaker-than-expected report suggests economic challenges. Which helps the fight against inflation. Potential Fed Policy Response: In response to disappointing economic indicators, such as the weak NFP report, the Federal Reserve may consider implementing monetary policy measures to support economic recovery. One such measure could be a reduction in interest rates to stimulate borrowing and spending, thereby bolstering economic activity. Gold as a Safe-Haven Asset: Gold is often viewed as a safe haven asset during times of economic uncertainty and inflation. The prospect of interest rate cuts by the Federal Reserve can further enhance gold's appeal, as lower interest rates typically diminish the opportunity cost of holding non-yielding assets like gold. Here is what to watch out for that might stop it from going up: Market Response and Federal Reserve Policy Decisions Market participants should closely monitor any signals or announcements from the Federal Reserve regarding interest rate decisions, as they can significantly influence investor sentiment and, consequently, gold prices. If it becomes more likely for the Federal Reserve to not cut rates, well expect gold prices to plummet. Economic Indicators and Geopolitical Developments: It's important to stay attuned to key economic indicators, central bank policies, and geopolitical developments that could impact gold markets. Any shifts in these factors could alter the trajectory of gold prices. (TECHNICAL ANALYSIS) Trade setup explained: Take-Profit is set at 2344 due to a strong resistance line there (see white horizontal line) Stop-Loss is set at 2311 which is right under 2315, 2315 has been showing stronger support. Conclusion: The weak NFP report and the potential for Federal Reserve interest rate cuts have contributed to upward pressure on gold prices. However, market participants should remain vigilant and assess the evolving economic landscape and its impact on gold markets. By monitoring economic indicators and central bank policies, investors can make informed decisions in the dynamic world of gold trading. Like always use proper risk-management. Greetings, Zila
OANDA:XAUUSDLong
by ZILATRADES
32
British pound listless despite strong GDPThe British pound is drifting on Friday. GBP/USD is up 0.05%, trading at 1.2531 in the European session at the time of writing. The British economy grew by 0.6% q/q in the first quarter, higher than the market estimate of 0.4% and above the Q4 2023 decline of 0.3%. This marks a rebound after a mild recession in the second half of 2023. GDP posted its best quarterly growth since Q4 of 2021 and was driven by increased expansion in the services sector. On a monthly basis, GDP rose 0.4% in March, up from 0.2% in February and above the forecast of 0.1%. This was its best performance in nine months. The British pound showed little reaction to the GDP data. The positive GDP report is unlikely to change the BoE’s rate path, which admittedly isn’t all that clear. The modest economic turnaround in the first quarter isn’t expected to be inflationary, which leaves the BoE on course to lower rates later this year. The Bank of England maintained the cash rate at 5.25% at yesterday’s meeting. The markets were hoping for a signal of a rate cut in June, but Governor Bailey didn’t play along, saying that the central bank needed to see more evidence that inflation remain low prior to cutting rates. Bailey added he was “optimistic that things are moving in the right direction”, which could be a signal that rate cuts are on the way. The markets have priced a June cut at around 50% and have fully priced a cut in August. It’s a light data calendar in the US, with UoM Consumer Sentiment the sole tier-1 event. The index is expected to drop to 76.0 in May, down from 77.2 in April. GBP/USD Technical There is support at 1.2499 and 1.2471 1.2552 and 1.2580 are the next resistance lines
by OANDA
1
FTSE 100 Can 2.5X versus the GBP In Dollar terms. We have analysed the FTSE100 #UKX the GBPUSD and UK Housing on a big time frame scale before. Here we have the FTSE 100 and the UK companies which have pricing power versus #Sterling which we know is heading to sub $1 As we have expectations of the #GBPUSD to target 0.71 in a head and shoulders target close to a 50% drop from current levels! British citizens are living in a inflationary nightmare. A potential lifeboat is investing their way out. NOT SAVING .. as saving in a ever worthless #Pound is only compounding your loss of purchasing power.
TVC:UKXLong
by BallaJi
2
GOLD - Trading Inside the Triangle#XAU/USD #Analysis Description --------------------------------------------------------------- + GOLD price is currently trading inside the triangle and the price has been ranging since May + I'm expecting the price to break downwards as the overall trend on lower timeframe is bearish. + We have good opportunity for a short trade here. --------------------------------------------------------------- VectorAlgo Trade Details ------------------------------ Entry Price: 2311.453 Stop Loss: 2325.813 ------------------------------ Target 1: 2304.801 Target 2: 2300.000 Target 3: 2290.430 ------------------------------ Timeframe: 1H Capital Risk: 1-2% of trading amount --------------------------------------------------------------- Enhance, Trade, Grow --------------------------------------------------------------- Feel free to share your thoughts and insights. Don't forget to like and follow us for more trading ideas and discussions. Best Regards, VectorAlgo
OANDA:XAUUSDShort
by VectorAlgo
Macro Monday 8 - S&P500/M2 Money SupplyMACRO MONDAY 8 S&P500 / M2 Money Supply ( SP:SPX / $WMN2S) M2 is a broad measure of the US money supply that includes cash, checking deposits, and other types of deposits that are readily convertible to cash such as CDs. M2 is seen as a reliable metric for forecasting/predicting inflation and for this reason it can be used as leading economic indicator. For example, when there is more cash made available or too much, more cash typically gets spent. A little more can be good, too much or too sudden an increase can increase the risk of inflation. That's why the Federal Reserve constricts the money supply when inflation rears its ugly head. At present the Federal Reserve is decreasing the M2 Money supply in an effort to slow down spending in order to control and reduce the rate of inflation. Since April 2022 the M2 Money Supply has reduced from $22 Trillion down to $20.82 Trillion. The money supply and its impact on Inflation combined with current interest rates has major ramifications for the general economy, as they heavily influence job availability, consumer spending, business investment, currency strength, and trade balance. The M2 Money Supply also has a major impact on the stock market and can act as catalyst for increased purchases of stocks (when the money supply is increasing as more money is available) and can also cause the selling of stock when money supply is tight or tightening as it is at present (as less money is available in the wider economy). The Chart – Accounting for Money Supply As noted above the M2 Money Supply is reducing and it is expected that this may result in the S&P500 making lower lows as the supply of money continues to contract. The S&P500 performance looks very different when it is adjusted to account for the increases and decreases of the money supply. We can achieve this by dividing the S&P500 by the M2 Money Supply (Chart 1). Chart 1 – S&P / M2 Money Supply - Since 1996 the Major Resistance Zone has stopped every progression higher. - In 2007 a rejection from the resistance zone resulted in the Great Financial Crisis - Major recessions are labelled with red arrows & market corrections with blue arrows. - Since GFC there have been a number of rejections from the resistance zone which have coincided with notable corrections for the S&P500 (see blue arrows). - The most notable of these rejections was the COVID Crash in March 2020. - We are at the resistance zone now and it appears we are struggling to breach above it and may be rejected again. Given we have been rejected by this level 5 times since the 2007 Great Financial Crisis, it seems wise to remain cautious and expect a rejection from this level again. Chart 2 – S&P500 & M2 Money supply (Segregated) - This chart shows you the S&P price action in isolation and underneath the M2 Money Supply for reference. - The declining M2 Money supply is like a weight or float pushing and pulling the S&P500 price action in its direction. - The M2 Money supply may gravitate down towards its long term trend line over the coming year(s) and one would expect the S&P500 to follow its lead and also gravitate lower. - Interestingly, on Chart 2 you can see that the level that the M2 Money Supply and the S&P500 were at prior to the pandemic would present an S&P500 price tag of $3,350. Summary Its seems unlikely that the S&P500 is about to break higher due to the overhead long term resistance zone on Chart 1 which helped predict the last two recessions (red arrows) and a handful of corrections (blue arrows). There is a strong likelihood of continued M2 Money Supply normalization towards its long term trend line on Chart 2, especially considering Federal Reserves continued efforts to constrict the money supply through quantitative tightening to help quell inflation. These efforts will likely subdue any attempt of positive price action on the S&P500. It is important to recognise that the Dot Com Bubble in 2000 pressed through the resistance zone on Chart 1 demonstrating just how big a bubble it was. It was initially rejected from the resistance zone in March 1997, however the M2 Money Supply was increasing at this time so whilst this outcome is always possible, it does not presently seem probable with M2 Money supply decreasing and likely continuing to decrease going forward. Another potential outcome is a false break out above the resistance zone on Chart 1. We have had an unprecedented increase in to the money supply since the March 2020 COVID Crash and this could have a lagging effect which eventually pushes us over the resistance zone. Fiscal Stimulus which is harder to predict could also help us arrive at this scenario. Regardless, if these circumstances are met with continued decreasing M2 Money Supply, I believe that it would be a short lived breach of the resistance zone resulting in maybe a $4,980 S&P500 price tag (a higher high) followed by a severe correction. That is IF M2 Money supply is still decreasing as the S&P500 makes those higher highs. And finally we have to consider what most people would consider to be the most unrealistic scenario, a Dot Com Style bubble towards the top red line on Chart 1. As improbable as this is, a combination of factors could lead us into this scenario; - The aforementioned lagging effects of the unprecedented never before seen increase in the M2 Money Supply since the pandemic. - Continued or new Fiscal Stimulus from the US government. - The bullish AI narrative (which appears to be dissipating at present) This final bullish scenario is worthy of consideration especially factoring in the comparisons of the 2023 AI hype to the 2000 internet boom. As we enter a new technological epoch with the likes of Augmented Reality, Cryptocurrencies and AI, are we getting ahead of ourselves again? Do these technologies need a little more time to mature much like the internet? Are we overextended like we were in 2000? It’s hard to answer no to any of these questions but against the backdrop of record levels of Quantitative Easing and Fiscal Stimulus we have to keep an open mind as the Fed tries to simmer us down from these record levels of liquidity It will be very interesting to watch these charts over coming weeks and months to see if we get our anticipated rejection from the resistance zone on Chart 1. A special mention to Ben Cowen from "Intothecryptoverse" who originally brought this style chart to my attention. My chart could be considered a snapshot of his view however I hope I have added to it in some way with the above commentary and some correlations I have noticed. Thank you for reading to the end. I hope these charts help frame todays market for you going forward. I’ll keep you posted on any major changes. PUKA
SP:SPX
by PukaCharts
ISM GAUGES POINT TO HIGHER INFLATIONISM surveys show that prices are rising ; during April services and manufacturing prices advanced 10% on average. The problem? Look at the chart comparing these price indexes to the traditional CPI inflation reading, ISMs are usually forward looking. Inflation 2.0 is coming ----------------------------------------------------------------------------------------------------------------- Las encuestas ISM muestran que los precios están subiendo, durante abril los precios de servicios y manufactura avanzaron 10% en promedio. El problema? Mira el gráfico que compara estos índices de precios con la lectura tradicional de inflación CPI, los ISM suelen ser prospectivos. Inflación 2.0 está por llegar
ECONOMICS:USIRYY
by yamilbocanegra
1
AUD/USD hits one-month high, RBA decision nextThe Australian dollar has started the week with modest gains. AUD/USD is up 0.25%, trading at 0.6624 in the European session at the time of writing. The Aussie is coming off a strong week, having gained 1.19%. The Reserve Bank of Australia meets on Tuesday and is widely expected to hold the cash rate at 4.35%, a 12-year high. The central bank has maintained rates three straight times and there is a strong likelihood that the rate statement will be hawkish, as inflation in the first quarter dropped from 4.1% to 3.6% but was above the market estimate of 3.4%. Inflation has come down significantly but remains sticky as the RBA tries to bring it back down to the 2%-3% target range. The RBA is making its rate decisions based on the data and that has the markets guessing as to what the rate path will look like. A rate cut isn’t coming until inflation falls and the RBA doesn’t expect inflation to fall within the target range before 2025. If inflation resumes its downward path in the next few months we could see a rate cut in November but at the same time, the risk of a rate hike has increased since the Q1 inflation report. As well, the job market has been tighter than anticipated, which makes it more difficult to lower rates. The RBA was very late in starting its rate-tightening cycle and policy makers will be very hesitant to lower rates until they are confident that inflation won’t rebound. US nonfarm payrolls eased to 175,000 in April, well below the market estimate of 240,000. The unemployment rate rose from 3.8% to 3.9%, above the forecast of 3.8%. Wage growth rose 0.2% m/m, lower than the 0.3% gain in March and shy of the market estimate of 0.2%. We haven’t seen all three components of the employment report miss their estimates for quite some time, which could point to cracks in the US labor market. AUD/USD tested support at 0.6606 earlier. Below, there is support at 0.6564 0.6651 and 0.6693 are the next resistance lines
by OANDA
BREAKOUT or FAKEOUT?? - EGHere I have EUR/GBP on the 4 Hr Chart! Ever since its visit at the Support Zone @ ( .8534 - .8528 ), Price has been steadily making Higher Highs and Higher Lows with the most significant High in the Price Action being Friday's High reaching the Resistance Zone @ ( .8586 - .8581 ) on the release of LOWER than expected NFP numbers for USD ( 175K Actual - 238K Forecast ) Now not only did we get an enormous Bullish Break on Friday, but by market close, most of those gains were given back bringing Price back to the cycle of Highs it broke AND a Minor Support Zone. So .. Is this a BREAKOUT or a FAKEOUT?! I think to answer this question, it will come down to the Fundamentals as of late! I believe EUR started to slightly overpower GBP Mar. 21st when BOE decided to HOLD their Interest Rates @ 5.25% Then, Apr. 17th GBP gets the HOTTER than expected CPI of 3.2% with BOE Bailey making the comment that Inflation looks to have quite a STRONG DROP in May ... Followed by a very disappointing Retail Sales read of 0% on Apr. 19th .. -COULD THIS MEAN GBP WILL BE THE NEXT UP FOR RATE CUTS?!?!- Well on Thur. May 9th, BOE meets to take vote on whether they INCREASE, DECREASE or HOLD RATES Also GDP Fri. May 10th .. From a Technical standpoint, I want to watch for Price to either: Find Solid Support at the Minor Level + Ranged Highs to continue higher -OR- Price to drop back down through the High/Low Range with a Bearish Break using Resistance from the Ranged Lows -DOES THE BOE HAVE THE DATA INFRONT OF THEM TO LOWER OR HOLD RATES??-
by Novi_Fibonacci
GOLD XAUUSD SELLGold prices could plummet if the Federal Reserve fails to enact anticipated rate cuts, particularly amidst widespread expectations for such actions. Here's why: Market Expectations: Investors often base their decisions on expectations, including anticipated actions by central banks like the Federal Reserve. If there's a widespread belief that the Fed will cut interest rates to stimulate the economy or combat inflation, investors may adjust their portfolios accordingly, including buying gold as a hedge against potential economic uncertainties or inflationary pressures. Pricing In Expectations: Financial markets typically "price in" expectations, meaning they incorporate anticipated events into current asset prices. In the case of gold, if investors expect rate cuts and buy gold in anticipation, the price of gold may already reflect these expectations. However, if the expected rate cuts don't materialize, the rationale for holding gold as a hedge against potential economic risks or inflation diminishes, leading investors to sell off their gold holdings. Disappointment and Market Reaction: If the Federal Reserve decides not to cut interest rates despite widespread expectations for such action, it could disappoint investors who had positioned themselves for a rate cut. This disappointment could trigger a sell-off in gold and other assets that were bought in anticipation of rate cuts. Additionally, the lack of rate cuts may signal to investors that the Fed is less concerned about economic risks or inflation than previously thought, further dampening demand for gold as a safe-haven asset. Shift in Market Sentiment: Market sentiment can quickly shift based on unexpected central bank actions or economic developments. If the Federal Reserve's decision not to cut rates is interpreted as a sign of confidence in the economy or a belief that inflationary pressures are transitory, investors may become less inclined to hold gold as a hedge. This shift in sentiment could accelerate the decline in gold prices as investors reevaluate their investment strategies. In summary, if the Federal Reserve fails to cut interest rates despite widespread expectations for such action, gold prices could decline as investors adjust their portfolios and reassess the need for gold as a hedge against economic risks and inflation.
FOREXCOM:XAUUSDShort
by ZILATRADES
GOLD SELL FED SAYS NO CUTSIf the Federal Reserve refrains from cutting interest rates this year, particularly when it was widely anticipated by the market, it could have significant implications for gold prices. Here's how: Market Expectations Disappointed: When market expectations aren't met, especially regarding key monetary policy decisions like interest rate cuts, it often triggers swift reactions. If investors had priced in rate cuts as a response to economic conditions, and the Fed chooses not to act, it can create a sense of disappointment and uncertainty in the market. Risk Sentiment: Market participants tend to assess the implications of central bank actions on broader economic conditions and risk sentiment. If the Fed decides against rate cuts despite perceived economic challenges or inflationary pressures, it may signal a more hawkish stance on monetary policy. This could lead to concerns about economic growth prospects and increased risk aversion among investors. Impact on Inflation Expectations: Expectations about future inflation play a crucial role in determining gold prices. If the Fed's decision not to cut rates is interpreted as a signal that they are less concerned about inflation or that they believe current inflationary pressures are transitory, it could lead to a reassessment of inflation expectations. Lower inflation expectations might reduce the appeal of gold as an inflation hedge, thus putting downward pressure on its price. Alternative Investment Opportunities: In the absence of expected rate cuts, investors may reassess their investment strategies and look for alternative assets that offer better returns or stability. If other investment opportunities appear more attractive compared to gold, it could lead to a shift in capital away from gold, resulting in a decline in its price. Overall, if the Federal Reserve chooses not to cut interest rates despite widespread anticipation, it could create uncertainty, dampen inflation expectations, and prompt investors to explore alternative investment options, all of which could contribute to a decline in gold prices.
OANDA:XAUUSDShort
by ZILATRADES
1
GOLD SELL NO RATE CUTSDear Traders, This why we think Gold is going to plummet, Persisting Inflation: Sticky inflation signifies a troubling scenario where prices resist adjusting swiftly to shifts in supply and demand or broader economic changes. If inflation persists at heightened levels despite the Federal Reserve's attempts to manage it through interest rate adjustments, it could signal a deeply entrenched inflation problem. Federal Reserve and Interest Rate Adjustments: Historically, the Federal Reserve resorts to interest rate cuts to spur economic expansion or counter economic downturns. In times of rampant inflation, the initial response might involve slashing interest rates to encourage borrowing and spending, thereby kickstarting economic activity. However, if inflation stubbornly persists or continues its ascent, the Federal Reserve might be forced to halt or reverse its rate-cutting measures to stave off further inflationary pressures. Implications for Gold Prices: Gold has long served as a refuge against inflationary storms. As inflation escalates, investors flock to gold as a means of safeguarding their wealth, knowing it tends to fare better than fiat currencies during inflationary storms. Yet, if the Federal Reserve halts rate cuts due to sticky inflation, it could signal an impending economic downturn or a tightening of monetary policy, potentially easing inflationary pressures in the long run. Anticipations and Market Forces: Should investors interpret the Federal Reserve's decision to halt rate cuts as an inadequate measure to address sticky inflation and stabilize the economy, it could trigger a panic in the markets. Fears of runaway inflation may intensify, prompting a mass exodus from gold as a hedge. Consequently, this could lead to a rapid decrease in gold demand, precipitating a sharp decline in its price. In summary, if sticky inflation forces the Federal Reserve to halt rate cuts, it could exacerbate inflationary pressures and erode confidence in gold as a safe haven asset, resulting in a dramatic plunge in gold prices. Nevertheless, market responses are highly unpredictable and influenced by a myriad of factors beyond inflation and interest rate policies.
FOREXCOM:XAUUSDShort
by ZILATRADES
1
BIG SHORT XAUUSD DON'T MISS ITWhy might Gold prices decline? Persistent Inflation: When prices exhibit stickiness, it means they don't adjust swiftly to changes in supply, demand, or the overall economy. If inflation remains high despite efforts by the Federal Reserve (the Fed) to manage it through interest rate adjustments, this scenario is termed sticky inflation. Federal Reserve and Interest Rates: Typically, the Federal Reserve cuts interest rates to bolster economic activity or counter economic downturns. Initially, in response to high inflation, the Fed might lower interest rates to spur borrowing and spending, thus stimulating economic growth. However, if inflation remains stubbornly high or continues to climb, the Fed might pause or reverse its rate-cutting measures to curb further inflationary pressures. Impact on Gold Prices: Gold is often seen as a hedge against inflation. As inflation increases, investors may turn to gold as a store of value since it tends to preserve purchasing power better than fiat currencies during inflationary periods. Yet, if the Fed stops cutting rates due to sticky inflation, it could suggest a potential economic slowdown or a tightening of monetary policy, potentially easing inflationary pressures in the long run. Market Sentiment and Expectations: If investors believe that the Fed's decision to halt rate cuts will effectively address sticky inflation and stabilize the economy, it could shift market sentiment. Investors may become less worried about inflation and less inclined to hold onto gold as a hedge. Consequently, this reduced demand for gold could lead to a decline in its price. In summary, if sticky inflation prompts the Fed to pause rate cuts, it could mitigate inflationary pressures and potentially diminish the attractiveness of gold as a safe haven asset, causing its price to decline. However, market dynamics are intricate and influenced by various factors beyond inflation and interest rate policies. Let us know what you think? make sure to leave a like :) Greetings, Zila
OANDA:XAUUSDShort
by ZILATRADES
Will DXY break Descending Channel at Support?!Here I have the DXY on the 4Hr Chart! For the past 2 weeks, Price on DXY has been steadily falling! With our Highs and Lows marked, we can see that Price is outlining what looks to be a Descending Channel! If price continues to follow down this channel, I suspect that the ( 105.53 - 105.025 ) Support Zone will be the area price will Most Likely find support to push higher!! What I want to see is Price test the Falling Support of the Descending Channel for a Third Time with a successful bounce ultimately turning this Descending Channel into a Bull Flag Pattern! -For added confirmation, once the next low is formed, I'd like to see: 1) The low be Equal too OR LOWER than the Second test of the Falling Support 2) A Bullish Divergence to appear on the RSI so underlying direction Fundamentally to finish the week: Advanced GDP, Unemployment Claims, Pending Home Sales (Thur) Core PCE, UoM Consumer Sentiment (Fri) -Another big fundamental factor to DXY strength will be the results from JPY Policy Rate decision and Core CPI released Thur!
TVC:DXYLong
by Novi_Fibonacci
GOLD BIG SHORT STICKY INFLATIONWhy would Gold prices go down? Sticky Inflation: Sticky inflation refers to a situation where prices do not adjust quickly to changes in supply and demand or changes in the broader economy. In this context, if inflation remains persistently high despite efforts by the Federal Reserve (the Fed) to control it through interest rate adjustments, it could be considered sticky inflation. Federal Reserve and Rate Cuts: Typically, the Federal Reserve implements rate cuts to stimulate economic growth or to combat economic downturns. When inflation is high, the Fed may initially respond by cutting interest rates to encourage borrowing and spending, thus stimulating economic activity. However, if inflation remains stubbornly high or continues to rise, the Fed might halt or even reverse its rate-cutting measures to prevent further inflationary pressures. Impact on Gold Prices: Gold is often considered a hedge against inflation. When inflation rises, investors may flock to gold as a store of value since it tends to retain its purchasing power better than fiat currencies during inflationary periods. However, if the Fed halts rate cuts due to sticky inflation, it could signal a potential slowdown in economic growth or a tightening of monetary policy, which might reduce inflationary pressures in the long term. Expectations and Market Dynamics: If investors perceive that the Fed's decision to halt rate cuts will effectively address sticky inflation and stabilize the economy, it could lead to a shift in market sentiment. Investors may become less concerned about inflation and less inclined to hold onto gold as a hedge. Consequently, this could lead to a decrease in demand for gold, causing its price to drop. In summary, if sticky inflation prompts the Fed to halt rate cuts, it could alleviate inflationary pressures and potentially reduce the appeal of gold as a safe haven asset, leading to a drop in gold prices. However, market reactions can be complex and influenced by various factors beyond just inflation and interest rate policies.
OANDA:XAUUSDShort
by ZILATRADES