Hey guys, this is the last full trading week in May, and many forward-looking individuals like myself are already preparing themselves to seize whatever opportunities June may have in store. On this note, I will review a few commodities that have satisfied my quest for swing-trading opportunities in the coming month. Follow me!
Is the Euro Set to Recover Yet?
2023-05-22 • Updated
Here's the scoop: The Bank of England (BOE) is set to accelerate the pace at which it shrinks its balance sheet, according to one of its deputy governors. Currently, the BOE is unwinding about £20 billion of quantitative easing every three months. The goal is to reduce the stock by around £80 billion per year through active sales and maturing assets. Despite concerns that this process, known as quantitative tightening, could destabilize markets, it has been smooth sailing so far. The BOE aims to strike a balance between reducing the balance sheet and maintaining market liquidity. Remember, though, quantitative tightening is not the primary tool for tackling inflation—interest rates take the lead on that front. Stay tuned to see how this plays out in the forex market!
EURUSD - H4 Timeframe
Last week, during the PPI live market trading session in the telegram group, I mentioned that the US Dollar was gradually nearing a resistance level and could soon get weaker. This exactly played out and led to the price rejection from the pivot zone as seen in the chart above. However, I still uphold the overall bearish sentiment in the EURUSD market, and I have thus marked the likely supply zone price would react from. The highlighted supply zone has confluences from twin resistance trendlines, bearish moving averages array, as well as the 50-period moving average resistance.
EURCAD - Daily Timeframe
Whenever I see the moving averages arrayed in either an increasing or decreasing order as we have on the EURCAD chart above, I tend to simply look for trades in the direction of that order. Another notable confluence is the fact that price has made an initial reaction to the pivot zone just slightly below the 100-Day moving average. Based on these criteria, I would expect price to rise slightly higher, towards the 50-Day moving average, even higher.
EURJPY - H4 Timeframe
When I noticed that the 50-period moving average had crossed below the 100-period moving average on the EURJPY chart, my initial deduction was that price might be preparing for a reversal. The candlestick pattern formed by the reaction from the highlighted supply zone gave me the confirmation I needed. The candlestick pattern indicates that the buyers may have been overpowered at that supply zone by a new influx of sellers. Hence, my sentiment on EURJPY would remain bearish unless by some unexpected market stroke, price rises above the supply zone.
EURNZD - Daily Timeframe
If you’ve followed and digested my analysis up until this point, then you likely already guessed my sentiment on this one - Bullish! As you can see, the moving averages are arrayed in an increasing order which readily suggests a rising price action. Then, having a pivot zone that aligns perfectly with the 100-Day moving average and a support trendline adds the final piece of the puzzle. My initial target on this EURNZD trade is the 50-Day moving average.
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
You can access more of such trade ideas and prompt market updates on the telegram channel.
The Bank of England (BoE) has dramatically shifted its economic forecasts. They no longer expect a recession in the UK and have upgraded their growth projections. This year, the BoE predicts GDP growth of +0.25%, a significant improvement from previous expectations. Next year's forecast is even more optimistic, with a projected growth of 0.75%.
It seems like the Canadian consumer has a firm grip on their wallet, which is no surprise given the current economic climate. Inflation in April crept up from 4.3% to 4.4%, adding to the financial woes.
Get ready for some suspense as the Bank of Canada faces a tough decision on whether to raise interest rates or keep them on hold. The resilient Canadian economy and the goal of curbing inflation further are at the heart of this dilemma. While some money markets and economists predict another rate hike, others believe the central bank should exercise caution and wait, hinting at a possible increase later in the summer.
Let's take a closer look at Australia's recent economic performance. Brace yourselves for some interesting developments. The country's economy experienced its slowest growth since late 2021 in the first quarter, raising doubts about the Reserve Bank of Australia's rapid interest rate increases. Despite the bank's record-breaking 12 rate hikes in the last 13 months, the resource-rich economy only grew by a modest 0.2% in the quarter, falling short of economists' expectations.
Let's dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don't pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear.