Sell-side on EURUSD: A Swing Trade Idea

Summary:

Despite the Jitters the FOMC has given to the dollar, EU is likely headed south as the Fed continues to fuel its intent on curbing inflation.

SELL EURUSD

Close Time

CLOSED

1.06005

Entry Price

1.05191

1.06536

1.09812 +0.00327 +0.29%

81.4

Pips

Profit

1.05191

1.05187

Exit Price

1.06005

Entry Price

1.06536

Fundamentals

On Wednesday, January 4, 2023, the US Dollar index has seemingly caught the short-end side of the stick as it traded -0.18% lower from its daily high after the release of the FOMC. The short stutter of the dollar may be fueled by the Fed’s intent to slower down its pace of raising rates after seeing modest growth on the economy—even conducting overnight repurchase agreement and reinvestment activities to further support the economies rebound.

However, this does not change their stance on the US Economy’s inflation level—as it continues to dance above what is wanted. The team believes that the undertone of EURUSD would still be carried by the strength of the dollar as the Fed has decided to increase Federal Funds Rate of 4.25% to 4.50%--inciting a .25% basis point hike; which has been the general go-to of the Fed at the span of 2022.

Technicals

Monthly

The monthly chart has seem to find sell-side pressure on the resistance area price is currently hovering to. With the latter being previously retested on May 2022—and proceeded with a 1,235 pip move downward. As we approach the same area again this month, we are locking in on a possible bearish impulse the market may provide.

Weekly

The Weekly chart is seen to be in a decisional as price is currently hovering above the 50MA while still trading below the 100MA. To interpret this clearer, market may be in a short-term buy trend—but will still provide strong bearish responses as it continues to loom below the 100MA. However, at this case, a short may be a more probable play as price is currently dealing with a monthly and weekly resistance—further supporting a possible sell-side play.

Sell-side on EURUSD: A Swing Trade Idea_1

Daily

Zooming into the Daily Timeframe, price has seem to found a resistance area along the daily 50% Fibonacci Retracement Area, however, we would advise to proceed with caution as there would be a possibility that price may continue to push upward for a retest of the latest resistance area that it tapped or find sell-side pressure along the 61.8% retracement level or 1.06452.

On our entry timeframe, we are taking a speculative short expecting that price will be kept from pushing further up as the 50MA and 100MA is in perfect confluence with the 50% Fibonacci Retracement level and an H4 Resistance. As our take profit objective, we are setting the recent low of 1.05191 as our TP Level and the SL at 1.06536—to keep our position safe from stop hunts. If ever price hits our Stop loss, there is a high probability that price may want to trade higher.

Sell-side on EURUSD: A Swing Trade Idea_2

TRADING RECOMMENDATIONS

Direction: Sell/Short

ENTRY – 1.06005

TP – 1.05191

SL – 1.06536

Risk Warnings and Investment Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

Near & Far, Neither Seems Friendly to Euro

King Ten

Forex

Summary:

With the Fed continuing to be hawkish at the near end and recession worries in the eurozone at the far end, the euro is hardly optimistic.

SELL EURUSD

Close Time

CLOSED

1.06200

Entry Price

1.03800

1.08600

1.09812 +0.00327 +0.29%

101.9

Pips

Profit

1.03800

1.05181

Exit Price

1.06200

Entry Price

1.08600

Fundamentals

Regarding US data, the ISM Manufacturing PMI for the US was released last night at 11 pm at 48.4 for December, slightly below expectations and contracting for the second consecutive month. JOLTS data was higher in December with 10.458 million job openings, above market expectations and an upward revision to the previous value. Each unemployed worker corresponds to 1.74 job openings, indicating that the U.S. job market remains tight, which imposes upward pressure on wage inflation. The next important data is the December non-farm payroll data due out this Friday, which is currently expected by the market to be 200,000 and the previous value was 263,000.

The minutes of the US Fed meeting released at 3 am were hawkish, with mention of concerns that the easing of the financial environment starting in November could make it tough to curb inflation. Such market behavior could lead the Fed to raise interest rates, thus increasing the likelihood of a "hard landing". And all members do not consider a rate cut in 2023. In addition, Neel Kashkari, a member of this year's voting committee and President of the Federal Reserve Bank of Minneapolis, spoke with great hawkishness, supporting at least another 100bp rate hike to 5.4%. The market is currently pricing in less than 5% for the terminal rate, and there is a big divergence between the market and the Fed.

Overall, the PMI data for the Eurozone released yesterday afternoon was better than expected. Energy prices have continued to fall recently, with crude oil prices falling back to the low levels seen throughout 2022. The futures price of natural gas has fallen to levels seen before the outbreak of the Russia-Ukraine war last year, leading to a drop in recent European inflation, as well as a rebound in European economic data. But the effect of energy on the economic rebound is already traded in the market in the 4th quarter of 2022. In 2023, the market will become more uncertain, and the main line of the market will shift from fighting inflation to trading in a substantial recession. We have to note that the temporary easing of the energy crisis will only treat the symptoms but not the root cause of the future eurozone economy, which will still face the test of stagflation in the future.

Technical Analysis

In the daily chart, EURUSD is currently consolidating continuously in the 1.05-1.07 range at highs; it has now fallen below the 20-day SMA, and there are signs of turning around in the short term. In addition, the MACD indicator still has a bearish divergence signal, and the opening is gradually widening after the formation of a death cross at highs. With strong bearish signals, the price may seek support near the 20-day SMA in the short term; however, over time, if it fails to effectively break through, the support will turn into resistance, and the first target below will still refer to 1.04. EURUSD: Near & Far, Neither Seems Friendly to Euro_1

EURUSD: Near & Far, Neither Seems Friendly to Euro_1

Trading Recommendations

Trading direction: Short

Entry price: 1.06200

Target price: 1.03800

Stop loss: 1.08600

Support: 1.04000/1.01000

Resistance: 1.08000/1.10000

Risk Warnings and Investment Disclaimers

Gap Between Indicators Is Narrowing, Suggesting that Bear Profit-taking May Occur

Eva Chen

Summary:

WTI crude oil continued to fall, closing below US$77 a barrel on Tuesday, its steepest decline since mid-November, as market sentiment worsened, coupled with mild winter temperatures in most parts of the world and reduced concerns about the energy crisis. Crude oil prices are likely to experience a struggle at the moment and a strong USD is likely to continue as investors cannot give up fixed income.

BUY WTI

Close Time

CLOSED

74.562

Entry Price

79.900

71.000

75.791 +0.695 +0.92%

164.8

Pips

Profit

71.000

76.210

Exit Price

74.562

Entry Price

79.900

Fundamentals

Crude oil futures led the way today, with high and low sulfur fuel oil down more than 6% and crude oil futures contract with the largest trading volume down more than 5%. At present, the pessimistic mood of economic recession has always contained the increase in oil prices; Among them, the economic activities in the U.S., Europe, and Asia have weakened significantly, which makes the economic prospects gloomier.

The IMF said 2023 would be a tough year for most of the world's economies because the major engines of global growth, the U.S., Europe, and major Asian countries, have all experienced weakening economic activity, making the economic outlook even bleaker.

Meanwhile, the strengthening of the USD has led to a general adjustment in major asset categories. The CPI figures released in Europe were slightly lower than expected, while the European Central Bank (ECB) still maintained its tight monetary policy, and market risk appetite might curb the upward momentum of oil prices. On the other hand, according to OPEC's data, OPEC's crude oil production increased in December last year. However, the oil-producing countries have a large gap from the production target for the current month, and the oil price weakened obviously under the pressure of both supply and demand.

Four interviewees surveyed by Reuters said that Saudi Aramco may lower the official selling price of light crude oil sold to Asia in February 2023 (after the price was set at a 10-month low this month, which was US$3.25/bbl higher than the average price in Oman and Dubai) and set the official selling price of medium-acid crude oil at US$1.5/bbl higher in February. One analyst surveyed said: "The market outlook is gloomy in the near term. Russia is expected to send more oil to Asia, but demand has not increased ".

In addition, due to the increase in refinery production, the production of low-sulfur fuel oil in the region is expected to remain strong, while the relatively weak profit margin of diesel oil refining increases the supply of low-sulfur fuel oil. In the short term, fuel oil itself lacks an obvious upward momentum, and the absolute price is expected to fluctuate with the crude oil range.

WTI crude oil may be driven by this week's API and EIA inventory data and top economic events, as any inventory variable may bring fluctuations.

The minutes of the FOMC meeting to be released in the middle of this week could shed more light on the Fed's policy plans. Reiterating their preference to continue raising interest rates for much of the year could send hedge funds back and put pressure on commodities such as crude oil. Overall, the risk of short-term oil price fluctuations is still relatively high.

WTI: Gap Between Indicators Is Narrowing, Suggesting that Bear Profit-taking May Occur_1

Technical Analysis

WTI crude oil continued to trade within the downtrend channel, with both highs and lows lower over a 4H timeframe. The drop in prices from the middle of the channel and attention could be paid to the resistance.

100 SMA is lower than 200 SMA, indicating that the path of least resistance is downward, or the downward trend is more likely to recover rather than reverse. However, the gap between the indicators is narrowing, suggesting possible bear profit-taking.

Meanwhile, stochastics is rising to confirm that bulls have taken the lead, but oscillators are also close to the overbought zone, suggesting that momentum will soon run out. A lower price would mean bears taking over the market again and could bring crude oil prices back to nearby lows.

Finally, the RSI has some room to climb up before it reaches the overbought zone to reflect the exhaustion of the bulls. It is recommended to go long at the lows to gain a rebound.

Trading Recommendations

Trading direction: Long

Entry price: 75.00

Target price: 79.90

Stop loss: 71.00

Deadline: 2023-01-18 23:55:00

Support: 74.20, 73.35, 71.67

Resistance: 76.18, 77.48, 79.68

Risk Warnings and Investment Disclaimers

Beware of Bear Bait in U.S. Session while Rising in Asian Session and Extending in European Session

Eva Chen

Commodity

Summary:

On the second trading day of this week, the gold price continued yesterday's strong performance, which is in line with our expectations. Although the short-term momentum of the gold price has weakened and there is a certain risk of a pullback, judging from the trend and signals, the pullback space is limited, and the overall prospect remains strong.

BUY XAUUSD

Close Time

CLOSED

1853.45

Entry Price

1880.00

1813.00

2026.55 +12.52 +0.62%

265.5

Pips

Profit

1813.00

1880.04

Exit Price

1853.45

Entry Price

1880.00

Fundamentals

On the second trading day of the week, the market continued to adjust its position in preparation for a series of important U.S. economic events to be announced later this week.

During the European session, as European stock markets opened higher, the USD continued to bear tremendous selling pressure. Meanwhile, the sell-off in U.S/ Treasury Securities yields has exacerbated the pain in the USD, perpetuating yesterday's strong interest-free gold price.

The strength of the gold price at the beginning of the year also benefited from the positive fundamentals. Recent U.S. inflation data show that the Federal Reserve's aggressive interest rate hike last year is suppressing the price of gold, but wage growth is still strong, which means higher interest rates will last longer. This is also an important factor for the Federal Reserve to push the peak rate hike to more than 5%. However, due to the weakening of interest rate hikes and the relative certainty of targets, the pressure on the gold price has decreased, which is an important factor for the positive performance of this round of gold prices. Although we believe that 2023 is still a highly uncertain year, gold is still one of the best-performing assets at the beginning of the year.

Looking forward to today, the gold price continued its strong trend after a brief weakening in the opening price, which is supported by the weakening of the USD and U.S. Treasury Securities yields. However, the US Dollar Index (USDX) in the 1D timeframe rose sharply and broke through yesterday. Currently, it is running in the Bollinger middle band and other SMAs above. Indicators signal that bullish momentum is still being maintained and gold prices may be limited in their intraday rally.

But if the USDX rebounds above its 10-week SMA, gold prices will face a correction. Since the quarterly line has already recorded the pattern of "Black Body Covering White Body", it indicates that it will continue to fall in the days to come. In addition, the monthly trend is also bearish; As a result, the USDX's rebound from the decline has been relatively limited. Finally, the USDX rose sharply overnight, and the gold price still recorded a white body, suggesting that the market's willingness to be bullish on the gold price was still very strong. If the gold price did not have a pullback before the USDX was blocked again to continue to fall back, it suggested that the gold price would dispel the pullback expectation and would continue to rise and strengthen. If it comes to a pullback when encountering resistance, its space will also be much smaller than the rally in the USDX, and will therefore continue to strengthen after this pullback.

XAUUSD: Beware of Bear Bait in U.S. Session while Rising in Asian Session and Extending in European Session_1

Technical Analysis

The new rally in gold could also be attributed to a major technological breakthrough in the 1D timeframe. The gold price confirmed the upward trend after breaking through the upward triangle on Tuesday. Even after retracing to our entry price of US$1825, it was not able to continue to break, so the subsequent strength of the gold price may continue to be extended.

Judging from the current structure, the bulls have no room to back down and continue to break straight until the strong momentum of triggering a loss of US$1880 is overwhelming. The trading logic is still " Beware of Bear Bait in U.S. Session while Rising in Asian Session and Extending in European Session". It is recommended to go long at the lows.

Trading Recommendations

Trading direction: Long

Entry price: 1853

Target price: 1880

Stop loss: 1813

Deadline: 2023-01-18 23:55:00

Support: 1852, 1842, 1825

Resistance: 1860, 1867, 1880

Risk Warnings and Investment Disclaimers

Surged After New Year, Will USD Reverse the Trend at the Beginning of New Year?

King Ten

Forex

Summary:

The market remains highly uncertain in 2023, but the probability of a unilateral decline in the USDX is low currently.

BUY USDX

Close Time

CLOSED

103.800

Entry Price

108.000

100.800

102.963 -0.289 -0.27%

147.5

Pips

Loss

100.800

102.325

Exit Price

103.800

Entry Price

108.000

Fundamentals

The USD has continued to fall for 2 months since last October, mainly due to a series of factors such as the Fed slowing down the pace of rate hikes, the ECB continuing to stay hawkish, the Japanese Ministry of Finance intervening in the currency market and the central bank raising 10-year bond yields. From the current point of view, 2023 is still full of high uncertainty, while the rate of decline in inflation, recession, the Fed's terminal interest rate level, and the Bank of Japan's possible exit from the negative interest rate policy will result in dramatic volatility in financial markets.

In general, the probability of a unilateral decline in the USDX is low now. The U.S. Markit final manufacturing value for December recorded 46.2, a new low since May 2020, showing weak manufacturing performance. In the high-interest rate environment, the gloomy economic outlook has led to lower manufacturing output, and this depressed scenario may continue in 2023. As for the labor market, November data illustrated that wage growth remained strong and the unemployment rate stayed low at 3.7%. This week's Nonfarm Payrolls data exhibited that the market expected the unemployment rate to stay at 3.7% in December, job growth slowed to 200,000, and wage growth slowed down YoY and MoM. Moreover, a strong job market may set inflation entrenched, leading the Fed to stay hawkish at this stage.

Technical Analysis

Regarding the daily chart, USDX has been consolidating above 103 since December. From this point of view, it is the consolidation support area of June 2022. Therefore, if the price fails to drop below 103, USDX could rebound to some degree, with the first rebounding target at 108. USDX: Surged After New Year, Will USD Reverse the Trend at the Beginning of New Year?_1

USDX: Surged After New Year, Will USD Reverse the Trend at the Beginning of New Year?_1

Trading Recommendations

Trading direction: Long

Entry price: 103.800

Target price: 108.000

Stop loss: 100.800

Support: 103.000/100.000

Resistance: 105.800/108.300

Risk Warnings and Investment Disclaimers

ETH Surged After the Release of Good News

King Ten

Cryptocurrency

Summary:

Market tensions have eased, but liquidity is still insufficient.

SELL ETH-USDT

Close Time

CLOSED

1260.00

Entry Price

1210.00

1310.00

2036.35 +33.44 +1.66%

63.2

Pips

Profit

1210.00

1253.68

Exit Price

1260.00

Entry Price

1310.00

Fundamentals

There is several good news after the beginning of the new year, including that the newly elected Prime Minister of Fiji supports Bitcoin and considering adopting Bitcoin as a legal tender, which could be a good booster for the market. In addition, RBI (Reserve Bank of India) said the interconnection between crypto assets and the traditional financial system is increasing and more mainstream polities are concerned about crypto assets. Besides, FTX Japan plans to return customer assets in February next year, which eased market tensions. Although the macro market and internal issues were eased, the crypto market still maintained a small pull-up trend and did not have a rapid rebound in early summer, which is still due to the lack of market liquidity and market confidence.

In general, the market is stimulated by the good news and shows a small rise pattern. It is expected to grow slightly this week but will not form a unilateral trend. Also, a new round of rallies requires sufficient liquidity and the market shall recover sufficient trust. Therefore, on the current macro market and internal panic relief, this week's trend will be a slow upward process, the previous high of 1350 will still be a test of huge pressure.

Technical Analysis

ETH will maintain an upward oscillation this week with a slightly bullish trend in the near term and keep a slow growth later. Furthermore, ETH will be still under pressure shortly after climbing to 1250, and it is better to focus on 1200 for the support below and keep the strategy of buying low and selling high within 50 points in the trading range this week. ETH-USDT: ETH Surged After the Release of Good News_1

ETH-USDT: ETH Surged After the Release of Good News_1

Trading Recommendations

Trading direction: Short

Entry price: 1260

Target price: 1210

Stop loss: 1310

Support: 1220/1180

Resistance: 1280/1350

Risk Warnings and Investment Disclaimers

Jan Aldrin Laruscain

Analyst

Jan Aldrin Laruscain is a market analyst of Forexway and enthusiast in trading currencies and indices. With his degree and passion for Finance, he have devised a specific way of trading which breaks down the market through orderflow analysis with deep consideration for fundamentals. He also write and create commentaries on the latest trends about all things finance!

Ranking

Articles

Win Rate

0.00%

P/L Ratio

3.13

Focus on

EURUSD, GBPUSD, GBPCHF

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Sell-side on EURUSD: A Swing Trade Idea

Fundamentals

Technicals

TRADING RECOMMENDATIONS

Near & Far, Neither Seems Friendly to Euro

Fundamentals

Technical Analysis

Trading Recommendations

Gap Between Indicators Is Narrowing, Suggesting that Bear Profit-taking May Occur

Fundamentals

Technical Analysis

Trading Recommendations

Beware of Bear Bait in U.S. Session while Rising in Asian Session and Extending in European Session

Fundamentals

Technical Analysis

Trading Recommendations

Surged After New Year, Will USD Reverse the Trend at the Beginning of New Year?

Fundamentals

Technical Analysis

Trading Recommendations

ETH Surged After the Release of Good News

Fundamentals

Technical Analysis

Trading Recommendations

USD/JPY Lower as BoJ Continues to Buy Bonds

Fundamentals

Technical Analysis

Trading Recommendations

Risk Disclosure