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FX Trends: Brutal Months for Day Traders and Happy Brokers

by with No Comment AMT MarketsAssetsFeatured Highlights

FX Trends: Brutal Months for Day Traders and Happy Brokers

The past few months for day traders have likely not been pleasant experiences for many. Forex, equity indices and other assets have experienced plenty of volatility and finding a trend has not been easy. While speculators who are wagering on the ups and downs in the marketplace have been getting crushed, their brokers likely have not been getting hurt.

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USD Cash Index Six Month Chart as of 7th of March 2025

Day traders need to understand that CFDs are virtual. Your broker is merely placing a wager for you on chosen direction, in most cases they are acting as ‘the house’ and know the volatility is going to knock you out of your trade. They pocket your losses as their winnings in many cases. The brokers are not only making money from the differentials from the bids and asks (the spread), they might also be charging you a transaction fee.

If a broker feels less confident about their ability to make a profit off your poor results (I am not kidding about this), then they sometimes insure your wager via a liquidity provider who in many cases is literally betting against your broker, because the liquidity providers believe your broker is likely being overly cautious. (A vicious circle). In other words brokers allow your trades to work virtually (not in the real marketplace) on something many risk management rooms in Forex call the B Book. If the broker is not certain if you will lose money, they put your trades into something called an A Book. And, yes, many liquidity providers (the A Book providers) are betting against their clients (who are brokers seeking to mitigate their risks).

Again, the brokers and the liquidity providers do not believe you will make money most of the time. They are allowing you to bet and they are happy to take your wager, because historical evidence shows retail bettors in Forex tend to lose money via their trading accounts at least 85% over long durations. Depending on what source you look at regarding CFD statistics, speculators tend to do a little better against their brokers but still lose money more than 50% of the time. Some statistics claim up to 75% of the CFD outcomes via trading accounts equate into losses for speculators.

And if all of this sounds like sour grapes, it is not, it is a warning to you the bettor. Brokers in many cases are glorified casinos that provide you an opportunity to wager. You need to acknowledge the above before your start trading. Speculating on Forex and CFDs ( via equities, indices and commodities) is like betting on a horse. The racetrack doesn’t lose money, they know most bettors simply enjoy the thrill of gambling and don’t mind losing. Racetracks are happy to pay the occasional winner. If you choose to wager on Forex and CFDs you need to practice risk management.

You probably didn’t come here to be reminded about risk management, you have heard it before – conservative leverage, price targets, timeframe parameters, entry – stop loss – take profit orders are standard warnings. You want to read about trends, you want to know which direction you should take, yet there are no guarantees and that is why speculating is gambling. You are wagering.

If you intend on improving your odds, by following solid risk taking tactics – including trying to understand behavioral sentiment via the financial institutions you are trying to emulate, you might find better results. And still, speculating will be tough.

The U.S will release Non-Farm Employment Change numbers today, but traders should pay attention to the Average Hourly Earnings report which will give insights about inflation too. However, the jobs numbers may prove to be a false narrative, because more importantly, whether you like him or not, there is the Trump Effect to ponder.

Tariff mantras and fears, negotiations regarding the fate of Ukraine, and a myriad of other concerns have financial institutions anxious as they try to seek clarity. Equity indices have been a mess. Yet, the USD Cash Index has given back a lot of its gains since February the 4th – this after the Forex bloodshed caused by nervous reactions to fear of tariffs being implemented. And now, not so coincidently the USD Cash Index is traversing values it saw on the 5th of November 2024, yes, U.S Election Day. Speculators and financial institutions have returned full circle to big unknowns.

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AMT Top Ten Miscellaneous Reckonings for the 8th of December

by with No Comment Behavioral SentimentCommoditiesFeatured Highlights

AMT Top Ten Miscellaneous Reckonings for the 8th of December

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10. France Falls: President Macron’s leadership is in peril after his anointed Prime Minister, Michael Bernier, suffered a no confidence vote outcome. French politics and finances are in shambles. Life for French citizens goes on as their politicians battle for their jobs, supremacy of voice and egos. With the restoration and presentation publicly of Notre Dame Cathedral yesterday, Macron now has to find something else to divert attention away from his misappropriation of power.

9. 100,000: Bitcoin came within sight of the 104,000 USD vicinity this Thursday, then sunk with a rapid pace and challenged 92,000. Once again traversing near 100 grand, large BTC whales and MicroStrategy’s Michael Saylor and his cult of followers are likely celebrating. However, if the wind changes direction what kind of damage will the low tides create this time for Bitcoin and speculative leveraged positions? The price of BTC/USD as of this writing is near 99,500.

8. Al-Assad: The Syrian regime is apparently coming to an end after 50 plus years in power. Bashar al-Assad’s whereabouts are unknown. Russia, Iran and Hezbollah appear for the moment to be big losers in this power play. The many factions will now have to see if they can create a semblance of government, but that remains doubtful. Syria will be a quagmire in the coming months as its cauldron stirs.

7. Martial Law: South Korean President Yoon Suk Yeol startled Asia and foreign investors by declaring martial law this past week, making one of the worst political miscalculations in recent memory. Yoon was quickly forced to rescind the decision. The USD/KRW spiked and KOSPI Composite sank via the instability. However, the South Korean National Assembly has shown the ability to provide leadership and display power of law prevails, this as they try to calm their citizens concerns and investor sentiment.

6. Roasted: Coffee Arabica has boiled again and commodity’s price is fighting within apex levels. Like Cocoa, both Arabica and Robusta Coffee have surged the past year as large players have created a strangulated grip which suggests the markets may be ‘cornered’. While some analysts are quick to point out weather conditions as a reason for the higher prices, the tenacity of Coffee and Cocoa to sustain upwards momentum is intriguing but also suspicious.

5. FX and Data: U.S jobs numbers this Friday were marginally better than anticipated and the Average Hourly Earnings came in slightly above expectations. Economists from different schools of thought are debating the potential of recession and inflation concerns, versus those who believe growth, greater transparency of U.S fiscal mandates and elimination of a bloated budget will be achieved when Trump’s economic policies takeover. Globally Forex conditions are showing signs of fragility because of the threat of tariffs and trade concessions by nations which may need to be made. Yet, it is quite possible the ‘bad news’ consisting of accusations of unfair trade agreements by Trump, and the reactions which have been cooked into the EUR, GBP, JPY, ZAR, MXN, CAD, NZD and others is overdone. While there could certainly be more weakness in major global currencies paired against the USD, upside potential mid-term may be more positive compared to near-term drawdowns. Retail traders still face difficult technical perceptions in the days ahead because financial institutions also remain shaky regarding their outlooks.

4. Pardon Me Joe: President Biden has forgiven his son, Hunter Biden, for crimes known and unknown for an eleven year period – that is not a round number ladies and gentlemen, with a Presidential Pardon. Why 11 years? Why not 10 or 15? There is conjecture that Joe Biden is also considering preemptive pardons for people his administration feels may face the wrath of the incoming Trump White House. However, if pardons are given to the likes of Anthony Fauci, won’t the pardons awarded to those who have not been charged with a crime yet look like an admission of guilt?

3. Central Banks: The ECB will deliver their interest rate decision on the 12th and the Federal Reserve will announce their Fed Funds Rate on the 18th. Behavioral sentiment however is seemingly more focused on the threat of potential storms that could suddenly appear due to the Trump effect. The ECB and Fed are both expected to cut their interest rates by a quarter of a point, while it appears many financial institutions no longer believe the Fed will cut again in January.

2. Chinese Gold: Tucked away in the quiet corners of the business news has been the discovery of a massive gold ore deposit in China. Some geologists claim the Wangu gold field could have up to 1,100 tons of the precious metal. If correct and the amount of gold meets or exceeds the expectations of the experts, the question about this becoming a deflationary event for gold is intriguing but likely wrong. Importantly, the gold will be a long-term benefit for China and potentially create a stronger national currency via the Renminbi (China Yuan). Perhaps also solidifying the idea of using the reserve as part of the backbone for a potential BRICS ‘Unit’ currency if and when that day ever arrives. Gold closed at nearly 2633.00 USD per ounce before going into this weekend.

1. Trump Effect: WTI Crude Oil is around 66.78 USD as the promise of easier energy production for U.S companies has created the conviction of steady and less expensive supply. The USD remains in the stronger elements of its long-term Forex range, and folks betting against the strength of the USD need to remain cautious. BRICS has been warned about not infringing on the USD by Donald Trump, and some member nations of the organization have affirmed they do not seek a BRICS currency (yet). Tariffs have been threatened, but China has responded by showing it has the ability to create potential hinderances this week via a tough negotiation stance by threatening to stop export of rare earth metals to the U.S. Mexico and Canada have felt the verbal wrath of the President-elect already and started to react. All of this while Donald Trump still has six full weeks before taking power.

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Forex: Dangerous Triggers Abound for Inexperienced Speculators

by with No Comment AMT MarketsAssetsFeatured Highlights

Forex: Dangerous Triggers Abound for Inexperienced Speculators

While the U.S jobs reports via the Non-Farm Employment Change and Average Hourly Earnings will grab attention today, and the Advance GDP this Wednesday and inflation numbers yesterday were important. Institutional trading focus in many respects will be elsewhere, behavioral sentiment and the potential reactions that lurk after the results from the U.S election are known are the biggest risk threat.

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USD/SGD Three Month Chart as of 1st November 2024

Yesterday’s weaker than expected Employment Cost Index will help the U.S Federal Reserve to clip another 0.25% off of the Federal Funds Rate on the 7th of November. However, the winner of the U.S Presidency will be a talking point in the coming FOMC meeting, and also the halls of the U.S Treasury, influencing potential policies. Weaker than expected jobs numbers would fuel dovish perspectives from financial institutions today, but because of the coming U.S election on Tuesday results will fall on ears possibly tuned into other frequencies. And let’s remember last month’s job numbers were stronger than expected, and revisions downward in the back months remains a problem causing mixed sentiment.

Major currencies versus the USD continue to thread within cautious weaker values. USD centric strength has been persistent since the last week of September. If this had been a normal week of trading, the USD would have likely gotten weaker after the Advance GDP results came in slightly less than anticipated. Fuel might have been added to USD selling on yesterday’s lower than expected labor costs too, but this did not happen in many cases. This needs to be a consideration for day traders who are trying to interpret U.S economic data as the U.S election looms. Simply put, behavioral sentiment in the near-term is being more influenced by the race for the White House.

If a trader wants to bet on who they think the winner of the U.S vote will be they need to be careful too, not only because they could be wrong, but if their ‘winner’ takes the presidency, reactions may be more tumultuous than planned. Speculators need to understand that financial institutions too have likely been positioning their cash forward transactions based on who they think is going to win the U.S vote. Meaning wicked reversals and take profit orders could be triggered when the U.S election outcome is known. Forex trading volumes next week should be immense.

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Gold Three Month Chart as of 1st November 2024

It is a dangerous time for inexperienced traders to participate in Forex. Brokers will certainly sell this alluring show and point out that there is a lot of opportunity to make money in the coming days, but the opposite is true too. Because if you can make a lot of money from volatility, you can also lose a lot of money. Folks without deep pockets who are using leverage will be vulnerable to price velocity.

Retail traders need to understand the risks that confront them are dangerous because their Forex positions cannot be held over a long-term because of too much carrying costs, too much volatility and frequently too much leverage. Large financial institutions who are the shakers in Forex play by a completely different set of rules. It may help a day trader immensely to understand they can really only feast on profits when they have been able to ride the technical momentum caused by the influence of financial institutions.

The cyclical nature of Forex has been on full display the past three months. Trading within the USD/SGD the past three months is a solid example of a major currency teamed against the USD and sustaining a strong bearish cycle on the expectation the U.S Fed would become dovish, and then the reversal higher since late September as financial institutions started to become risk adverse. While some analysts may argue this point, the coming results in the weeks ahead will tell us a lot as large players react to clarity via a new U.S President and the Federal Reserve’s monetary policy outlook. Traders large and small over the next five days in Forex will be treated to quite a carnival like experience.

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Trading Risks: Easy to be Nervous Now, But Calm is Needed

by with No Comment AMT MarketsAssetsFeatured Highlights

Trading Risks: Easy to be Nervous Now, But Calm is Needed

Simply put it is too easy to be nervous when contemplating the markets if you are a day trader. Today the Non-Farm Employment Change data will be published in the U.S and the Middle East conflict continues to reverberate. However, if a speculator looks at the markets they will see risk adverse trading has produced rather predictable results in many assets.

Gold remains within its higher known price realm, and WTI Crude Oil is trading around 74.00 USD after President Joe Biden for some odd reason felt it was necessary to discuss publicly potential targets Israel may pursue against Iran. Also, Biden’s influence on the decision making in the Middle East appears to be fleeting and this is making financial institutions additionally anxious.

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WTI Crude Oil Five Day Chart as of 4th of October 2024

The employment numbers from the U.S today are vital regarding the Federal Reserve’s interest rate decision for November. If today’s jobs statistics come in weaker than expected this could help the USD lose some ground in Forex against major currencies. However, there is also the prospect that headwinds via concerns from the Middle East will keep a steady diet of risk adverse trading a driver for behavioral sentiment going into the weekend. Forex remains dangerous for day traders in the near-term.

Traders who believe more volatility will come because of the ramifications in the Middle East can certainly pursue assets like gold and WTI Crude Oil. Correlations with risks that are flourishing as potential conflict brews is not a foolish wager, but it is also difficult for speculators to pursue these trades via CFDs offered by many brokers, this because day traders may have to hold onto their positions too long in order to take advantage of potential moves. If a speculator can pursue options positions via future markets, this could prove to be a solid tool, provided strike prices are not outrageously expensive and the prospect of time erosion is not too fast.

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Gold Five Day Chart as of 4th of October 2024

This is not an easy time to be a day trader and those that are nervous should choose to remain on the sidelines. U.S Treasury yields have increased this week as behavioral sentiment has become jittery. It is important to remember however that short-term reactions are frequently not related to long-term outlooks. Treasury yields have come down significantly in the mid-term and remain within the lower part of their range. The same can be said for equity indices this week. The notion that the world will not spin out of total control should be considered. Risk adverse trading will certainly begin to gravitate towards optimism at some point, it is only a question of time.

The point for day traders is this, it is easy to be nervous. Watching television all day and looking at smartphones for updates on developing sagas does not help create calm. Large institutional traders have been within these volatile waters before. Yes, large players also have to remain diligent, but they will certainly do their best to remain realistic. Short-term price velocity often leads to reversals and you can be assured large financial institutions will take advantage of this insight.

If today’s U.S jobs numbers meet or come around expectations this would be a welcome result for markets which appear to be standing on fragile ground. Traders while looking at today’s Non-Farm Employment Change numbers and Average Hourly Earnings statistics should also be mindful of downward revisions to previous reports which have occurred almost consistently for a handful of months. Initial trading reactions to the publication of jobs data are often met with sudden reversals due to revisions in numbers being spotted a few moments later by analysts.

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USD/JPY Five Day Chart as of 4th October 2024

As for the Middle East, financial institutions and traders are all in the same boat. Patience and deep breaths are needed. The trillion dollar question lurking, is there an end game that is viable and can restore calm, or will retribution and hatred cause the conflict to spiral out of control?

The volatility seen in Forex the past handful of days, including the USD/JPY, have caused dynamic results. There is no denying risk adverse trading has taken hold of the marketplace. The trifecta of U.S jobs numbers today, tensions in the Middle East, and the approaching U.S election have set the table for a tumultuous meal. At some point day traders may want to walk away from the table to avoid indigestion and return only when tranquility has been restored.

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AMT Top Ten Miscellaneous Salvos for the 29th of September

by with No Comment AMT MarketsAssetsFeatured Highlights

AMT Top Ten Miscellaneous Salvos for the 29th of September

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10. Profit: OpenAI has announced plans to become a money making corporation. Founded in 2015 the artificial intelligence company had the stated goal of creating ‘safe and beneficial’ technologies via its foundation, and now will face the slings and arrows of investors and potential critics. The AI boom the past two years has produced many new competitors. Can Sam Altman, the CEO of OpenAI, sustain the momentum generated or will negative organizational impetus turn the company into an also-ran?

9. Softs: Cocoa, Coffee and Sugar all remain volatile and playgrounds for day traders who like casino experiences via CFDs. Cocoa is again over 9,000 USD, Sugar touched February highs this past week as it shows signs of extreme speculation, and Coffee Arabica surged to record prices on Thursday and Friday. Over exuberance however is not being created by day traders, it is the work of large institutional traders who are in control. While the ‘softs’ may look overbought it would be unwise to bet against trends while big players pursue bullish notions. Massive money is being made in these commodities, but losses are also being felt by those who wager incorrectly.

8. Escalation: Risks in the Middle East have become a focal point, this as the region appears to have generated more must watch television. The noise which the media seemingly craves is hard to escape. Market participants cannot be blamed for maintaining vigilance as sabers rattle, especially after Friday’s events in Beirut when Hassan Nasrallah, the Hezbollah leader, was eliminated by Israel. However, experienced traders who are also strategic analysts have seen this show before and may turn the channel knowing there will be reruns in the future.

7. WTI Crude Oil: Prices closed within the lower elements of the commodity’s long-term depths. Traders did have a chance to react to Friday’s developing news from Beirut, but the energy sector remained calm. The price of WTI was around 68.57 going into this weekend, after trading at highs earlier in the week. For all the talk about fear of escalation from the Middle East, the price of Crude Oil remains within a remarkable bearish stance as large traders appear to be more concerned about lackluster economic growth globally.

6. Apex Gold: The price of the precious metal flirted with 2,685.00 momentarily on Thursday. The price of gold going into this weekend finished near 2,658.00 USD. Sustained highs have certainly continued to catch the attention of short-term speculators, but they need to be aware the commodity does remain susceptible to sudden spikes. While alluring, gold remains dangerous for day traders.

5. Countdown: The U.S Presidential vote is slightly more than 5 weeks away. Interestingly, the Fed will announce their Federal Funds Rate decision only two days after the election results. Will the outcome of the vote change the Fed’s perspective on interest rates? Financial institutions will definitely brace for the outcome of the U.S vote. Cautious winds will start to prevail as the 5th of November draws closer.

4. China: A huge stimulus package from the Chinese government has been initiated, but talk regarding potential effects and outcomes are being debated. The notion that the Chinese economy is be driven too much with a top to down centralized approach is being vocalized by some worried ‘outside’ observers. The USD/CNY is trading near 7.0105. The Shanghai Composite is near 3,087, this after massive gains via a reversal upwards which was sparked from lows around 2,691 which were seen on the 18th of September.

3. Risk Appetite: U.S equity indices continue to challenge record values in the Dow 30 and S&P 500. Yes, the Nasdaq remains beneath its highs, but is still within sight of all-time heights. Trading this week will work under the shadow of the jobs numbers coming this Friday. Financial institutions have produced rather positive behavioral sentiment and do not seem like they are ready to back away from this stance. Are some large market participants starting to quietly bet on the possibility of a Trump victory which they believe would be good for U.S stocks?

2. Forex: USD centric notions remain the impetus in foreign exchange. The USD Cash Index is within the lower boundaries of its long-term values as it trades near July 2023 realms. If the USD Cash Index moves lower it would then start to technically be within price calculations not seen since the spring of 2022. Action in the USD/JPY and GBP/USD, and other major currency pairs have been volatile, choppy conditions should be expected this week for traders leading into Friday’s key data.

1. Jobs Numbers: Last week’s GDP statistics met expectations, while inflation numbers via the Core PCE Price Index came in slightly below estimates. The growth and inflation outcomes set the table for the Non-Farm Employment Change and Average Hourly Earnings which will be reported on the 4th of October. If the employment numbers continue to trend lower and there are additional negative revisions this coming Friday, this could propel USD selling. Financial institutions are trying to figure out if the Fed will cut by 0.25% or 0.50% in November. The Fed was aggressively dovish when they cut the Federal Funds Rate by 0.50% on the 18th of September, but the U.S central bank might want to be cautious in November following the election and wait for all the dust to settle and cut by only 0.25%. Thus allowing for another interest rate cut in early 2025 if needed. The broad markets are in a reflexive mode for the time being, this Friday’s data will be important and cause an immediate reaction that day traders will notice.

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Has a Great Selloff Begun? The Fed Holds a Crucial Card

by with No Comment AMT MarketsAssetsFeatured Highlights

Has a Great Selloff Begun? The Fed Holds a Crucial Card

Once upon a time the Federal Reserve caused a massive amount of fear to simmer and then boil over in the global market place but this is no fairy tale, the date was the 5th of August 2024 to be exact. However, the trigger causing events to unfold was pulled on Thursday the 31st of July. The Bank of Japan increased their policy rate to 0.25%, which was an increase of 0.15%. Then later on the same day the U.S Fed published a cautious sounding FOMC Statement followed by an inconclusive Press Conference, which left investors scratching their heads.

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Nikkei 225 Three Month Chart as of 4th September 2024

Markets started to react with scorn on Friday the the 1st of August, particularly when the U.S jobs numbers showed a big miss with the Non-Farm Employment Change numbers, and also a lower than anticipated Average Hourly Earnings report was produced. Because Japan was essentially closed for equity trading when the U.S jobs data was released late on Friday, the Nikkei 225 responded with fury on the 5th of August. Global markets essentially crumbled over the next twelve hours as a massive selloff was sparked.

Some analysts noted the move lower in equity indices was an overreaction and the wild Forex trading would calm down, and this began quite predictably on the 6th of August. In essence the bad jobs numbers from the U.S proved the Federal Reserve was being too cautious and would need to begin sounding more aggressive regarding interest rate cuts. This dynamic played out when Fed Chairman Jerome Powell made his Jackson Hole Symposium speech on the 23rd of August and admitted the Fed would have to begin cutting interest rates – and he seemed to indicate the use of a plural regarding Federal Funds Rate cuts. This dynamic essentially confirmed what most financial institutions had bet on starting in late July via Forex. Equity indices which were able to recover plenty of lost ground after the 5th of August, also built up more momentum per Powell’s rhetoric at Jackson Hole.

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USD Cash Index Three Month Chart as of 4th September 2024

However, Powell while sounding more dovish did not say how much the Fed would cut by in September. And based on the history of the Fed’s rather cautious and very passive monetary policy over the past handful of years, many financial institutions likely felt a cautious outlook should include a 0.25% cut on the 18th of September and then another 0.25% move lower in November. In the last week of August – yes, last week – equity markets started to show signs of nervousness again and the USD began to produce choppy trading before going into the Labor Day holiday.

Yesterday’s large selloff in assets has sparked more worries. While it is clear U.S inflation data has shown signs of erosion, the Federal Reserve has not indicated in any form that a Federal Funds Rate cut of more than 0.25% should be expected in two weeks. And perhaps not so coincidentally, the U.S Non-Farm Employment Change and Average Hourly Earnings data will be published this Friday. The outcome of these two reports will shake the ground for investors and financial institutions may be positioning for the drama.

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Nvidia Three Month Chart as of 4th September 2024

An interesting three month barometer looking backwards has been created by Nvidia which has been choppy. While it remains only a ‘stock’, the company’s earnings and outlook are firmly on center stage for many investors. Nvidia has soared in value the past year. While some may feel that the asset is within a bubble, the company continues to post impressive earnings and its outlook appears bright as new software and hardware relies upon its products and development promises. Some analysts have said that earnings reports from Nvidia are now just as important as U.S economic data like inflation and jobs numbers. However, that is overstated, but let there be no doubt that Nvidia’s trading results over the next six months will probably tell us a lot about global market conditions and behavioral sentiment within financial institutions.

Day traders should not panic, they have the capability of watching from the sidelines if they choose over the next few days. The USD is still standing on weaker legs and Gold remains near 2,500.00 USD. Investors who have long-term holdings will certainly be nervous and want to make sure their mid-term yield perspectives are alright and their long-term targets are safe. Speculators small and large know the Fed will definitely cut the Federal Funds Rate in September. Yet, the trillion dollar question is if the Fed will only cut by 0.25%?

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Gold Three Month Chart as of 4th September 2024

If the U.S jobs numbers this Friday come in below anticipated results once again, the Fed should strongly consider a 0.50% basis cut to the Federal Funds Rate on the 18th, that is what financial institutions would certainly like to see. They should also consider coming out with a brief statement this Friday to make sure investors know that a more aggressive stance will be taken if the jobs numbers are weak. However, as long time day traders and investors know, it is not in the Fed’s nature to grab the microphone loudly, unless a seismic event is taking place in the world and inflicting harm on the financial markets. Are investors now trying to warn the U.S Federal Reserve that they will ignite a major selloff unless the Fed becomes more aggressive?

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Central Banks and Summer Storms for Traders as Actors Change

by with No Comment AMT MarketsAssetsFeatured Highlights

Central Banks and Summer Storms for Traders as Actors Change

Yesterday’s rather quiet start to the week regarding economic data allowed for traders to look over the financial markets before the onslaught of central bank mayhem hits on Wednesday. The Forex market has seen rather interesting results the past few weeks as behavioral sentiment has clearly shifted (for seemingly the tenth or so time) towards a more dovish outlook regarding the U.S Federal Reserve. Expect stormy waters this week in currency markets.

The usual lazy summer of the markets has had to deal with political winds in June and July as Britain, France and the U.S have delivered rather intriguing mischief via election results and changes of leadership. However, the world has survived and this is a lesson new day traders need to understand quickly. While tomorrow may not be known, experienced market players have seen these dramas before, they might be new episodes with different actors, but the theme remains the same for veterans of the markets.

Although powers shift, a focus on outlooks is often what matters. People and institutions are in pursuit of profit. This week central banks will be heard from and the rhetoric delivered will affect assets.

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GBP/USD Five Day Chart on the 30th of July 2024

Monday, 29th July, U.K assorted data – Mortgage Approvals, Net Lending to Individuals and M4 Money Supply data was released to various fanfare yesterday and did not shake the GBP/USD dramatically. However, making more important news perhaps was the public statement by Rachel Reeves, who is the new Chancellor of the Exchequer, saying there is an existing 22 GBP billion ‘black hole’ within the U.K government finances that was not accounted for by the Conservatives. In other words the blame game between the new Labour bosses and now banished Tories has begun. While the GBP/USD dropped a bit on this development, it did not crush the currency pair as it returned to the lower depths of its higher three month technical chart.

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GBP/USD Three Month Chart on the 30th of July 2024

Tuesday, 30th July, E.U Gross Domestic Product – a variety of GDP reports came from across the continent this morning, including France which recorded a slight gain of 0.3% and the German numbers which recorded a minus -0.1% result. The numbers show the E.U remains in trouble for the larger economic nations. Spain did show an improvement, but it is nothing that should start parades of celebration.

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EUR/USD One Month Chart on the 30th of July 2024

Tuesday, 30th July, U.S CB Consumer Confidence – this sentiment report for the U.S consumers will get some notice today, but financial institutions are largely braced for tomorrow’s U.S Fed rhetoric. The trading of Forex, gold, equities and their indices will likely remain choppy today as folks take on cautious tones.

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Wednesday, 31st July, Bank of Japan Policy Rate – and here we go ladies and gentlemen. The BoJ can never be counted on to do what is logical in the eyes of many analysts outside of the central bank’s inner circle. Japan has pursued a soft devaluation of the Yen this year. The Bank of Japan should consider an interest rate hike to the 0.20% level from the 0.10% ratio, but will they? Speculators need to be extra careful with the USD/JPY over the next 30 hours. If the BoJ somehow decides to raise and the U.S Fed makes it known they will consider more than one interest rate cut this calendar year, the USD/JPY could see swift price velocity lower. Perhaps the BoJ will stay muted and cautious, allowing for the currency pair to go higher again. However, there have been some signs large players suspect a slight interest rate hike could come tomorrow from the Bank of Japan. Day traders are advised to be extraordinarily careful.

Wednesday, 31st July, U.S Federal Reserve FOMC Statement – the Fed is not going to lower their Federal Funds Rate during this meeting. But what they are expected to do via their FOMC policy rhetoric is to say a cut is likely in September considering the current economic data, and that if inflation continues to show signs of erosion another cut will be considered in November. Recent economic data in the U.S has been mixed. GDP numbers jumped higher, but importantly the GDP Price Index was lower than anticipated last Thursday, and the PCE Price Index on last Friday matched expectations (and importantly didn’t rise). If the Fed sounds optimistic about an interest rate cut in September this will match the expectations of many financial institutions. If they sound cautious about a possible second rate cut later this year, this could cause a hiccup for those with weaker USD centric outlooks over the mid-term.

Thursday, 1st August, U.K Bank of England Official Bank Rate – the BoE is expected to lower the borrowing rate by 0.25% to 5.00%. The GBP/USD has been trading higher in July based on a cocktail of a weaker USD stance. There is plenty of reason to believe the less than sterling economic data from the U.K will help deliver the lower interest rate from the BoE this week. The BoE is likely to have spoken with the Fed and ECB to correlate a gameplan. The Bank of England Monetary Policy Summary should be given attention. GBP/USD traders will have responded to the Fed’s outlook from Wednesday, opening the door to plenty of volatility after the BoE speaks. Meaning that Forex speculators should be extremely cautious if they are pursuing short-term wagers which will be akin to surfing a violent storm.

Friday, 2nd August, U.S Non-Farm Employment Change and Average Hourly Earnings – this data will be anti-climatic. The results from Wednesday through Thursday from the central banks will take a lot of the bang out of these reports. The earnings report should be given some attention, but the financial markets will likely be trading on behavioral sentiment generated over the prior days.

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Forex: Shifting Winds and Potential Optimism for Speculators

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Forex: Shifting Winds and Potential Optimism for Speculators

The BoJ intervened in Forex and propelled two fast selloffs of the USD/JPY last week. The actions by the Bank of Japan did not come as a surprise as the central bank seeks to maintain a dovish interest rate policy, a relatively weak Japanese Yen – but also a philosophy of not letting the JPY to suffer too much. Speculators and financial institutions got caught up in the price action which ensued as a clash developed between large traders and the BoJ as equilibrium was sought.

The BoJ clearly wants to keep the USD/JPY within the weaker realms of its long-term values to spur on the Japanese export sector with solid business results. However, domestically the Japanese government doesn’t want inflation within Japan to inflict too much pain for its citizens. BoJ interventions were carried out twice last week, once during a holiday in Japan, and the second when most global financial institutions were shuttered. At the time of this writing the USD/JPY is trading near the 153.720 mark.

Day traders always need to understand just how small they are within the larger speculative world. They need to judge economic intelligence and forecasts to get an understanding where behavioral sentiment could affect tides.

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USD/JPY One Month Chart on 6th of May 2024

In the U.S, inflation and growth data caused investors to react nervously a week and a a half ago, additionally more anxious moments were fueled by the Federal Reserve’s FOMC Statement this past Wednesday when the Fed said it was uncertain about the timetable that inflation would return to their stated goal of two percent. Forex trading has been volatile the entire calendar year of 2024 for speculators.

Nearly ten days ago while inflation continued to prove it was stubborn via the U.S GDP Price Index on the 25th of April, Advance GDP data was much weaker than expected showing that economic growth was slowing. And last Friday’s Non-Farm Employment results were not only weaker regarding hiring, but also showed a slight drop in Average Hourly Earnings. This might have been enough to begin causing a shift in financial institution outlooks. This week of trading will prove interesting regarding risk appetite versus risk averse sentiment, particularly if large players believe economic data is finally catching up to the Fed’s rhetoric.

U.S equity indices which started last week with selling and battled lower depths in the middle of the week, began to see buying develop on Thursday, and finished Friday’s trading within their highs via weekly technical charts. While it is easy to report the past, it is the future speculators want to know. The ability of the U.S jobs numbers to produce results which were seen in a favorable light regarding the Fed’s ability to potentially cut the Federal Funds Rate certainly was an optimistic sign for financial institutions. If inflation can remain under control it would help the global economic picture. On that note, WTI Crude Oil is trading below 80.00 USD and should be monitored.

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S&P 500 Index Three Month Chart on 6th of May 2024.

Monday, 6th of May, European Union Final Services PMI – Italy, France and Germany among other will present Purchasing Managers Index data. The broad numbers are mostly expected to replicate the previous month’s outcomes. Traders should note the U.K is observing a banking holiday today, which means lighter than normal Forex volumes will be seen.

Tuesday, 7th of May, Reserve Bank of Australia Monetary Policy Statement – the central bank is not expected to change its interest rate. The AUD/USD has provided some upwards momentum the past week. The RBA is not expected to step out of line regarding global central bank policies. Expect talk about an optimistically cautious outlook by the RBA as they preach patience regarding an interest rate cut.

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AUD/USD One Month Chart on 6th of May 2024

Wednesday, 8th of May, Bond Sales from Japan, the U.K and the U.S – while many European nations observe a holiday, Japan, Great Britain and the U.S will sell government debt. U.S Treasury yields should be watched and equity indices should have an eye kept on them. If behavioral sentiment remains optimistic as this day comes to a close it could set the table for more bullishness, particularly if the USD remains relatively tame or weaker.

Thursday, 9th of May, Bank of England Monetary Policy Summary – the BoE is likely to mirror other central banks and keep its interest rate policy in place. No changes are expected to the Official Bank Rate. However, it would not be surprising to hear the BoE try to pose upbeat expectations, and if this occurs perhaps the GBP/USD will continue to find some momentum upwards.

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GBP/USD One Month Chart on 6th of May 2024

Thursday, 9th of May, U.S Weekly Unemployment Claims – investors will keep their eyes on the jobs report. If the numbers come in around expectations this would allow risk appetite to remain strong in the near-term.

Friday, 10th of May, U.K Gross Domestic Product – an expected gain of 0.1% is forecast. GBP/USD traders who have bullish sentiment will be looking for the number to match expectations or beat the anticipated result. If the number is weaker, this could cause a reversal lower in the GBP/USD and an attempt to push back against gains made in the currency pair recently.

Friday, 10th of May, U.S Consumer Sentiment and Inflation Expectations via the University of Michigan – these readings will be watched by investors to see if consumers continue to show decreasing confidence in the U.S economy. While it sounds counter intuitive to want eroding sentiment regarding the ability to spend money, this would create more ammunition for the Federal Reserve to consider an interest rate cut. The Inflation Expectations could be the catalyst for traders going into the weekend regarding the USD.

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Impact: Powell’s White Flag, Inflation Data, and the BoJ

by with No Comment AMT MarketsAssetsFeatured Highlights

Impact: Powell's White Flag, Inflation Data, and the BoJ

Federal Reserve Chairman Jerome Powell’s waving of the ‘white flag’ last Tuesday, when he admitted that inflation was producing stronger than anticipated data had been essentially wagered on since the second week of March by financial institutions. Powell’s speech acknowledging the Fed will find it difficult to cut the Federal Funds Rate in the mid-term (and probably at best not until late this summer) simply verified Forex positions which had already been taken by large players who could afford to make mid-term wagers.

The USD Index has returned to early November 2023 values, and appears able to challenge late September and October prices if inflation data this week causes more volatility, which should put traders of major currencies like the GBP, EUR, JPY and others on full alert. After the USD spiked higher from the 10th to the 12th of April, Forex speculators have seen dynamic action incrementally flirting with stronger USD results the past week and a half.

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USD Cash Index Six Month Chart as of 21st April 2024

Nervous trading continues to be seen in U.S equity indices. The Dow 30 and the Nasdaq 100 are fighting near ratios they touched in the last week of January. And the S&P 500 is traversing ground from the first week of February.

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S&P 500 Three Month Chart as of 21st April 2024

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Gold Six Month Chart as of 21st April 2024

Gold remains speculatively high as its hovers near 2,400.00 USD per ounce. The price of the precious metal has not given back its gains made since the start of March and this is intriguing because of the ‘known’ USD inverse correlation, which had proven to work well with the precious metal over the past couple of years but has been stopped in its tracks for the moment. Technically Gold may look overbought, but geopolitical concerns and the prospect that some central banks may be strong buyers could be fueling the rather incremental gains. Retail traders of Gold need to be careful because price action is likely to produce more surprises.

Forex has been turbulent the past handful of months as shifting behavioral sentiment has created choppy conditions. This coming week contains large fundamental risk events via data releases traders should monitor. USD/JPY speculators will also have to contend with the Bank of Japan.

Monday, 22nd of April, China Loan Prime Rates – borrowing costs are anticipated to remain at the current benchmarks. China produced slightly better Gross Domestic Product results last week, but Industrial Production numbers were weaker. Consumers in China remain burdened by decreasing home values and concerns about the economy.

Tuesday, 23rd of April, European Union and U.K Manufacturing and Services PMI – E.U results via the PMI readings are expected to show slight improvements. However the readings from the United Kingdom are anticipated to come in flat. The EUR/USD and GBP/USD will be affected by the results, but the currency pairs will likely remain focused on U.S data later in the day.

Tuesday, 23rd of April, U.S Purchasing Managers Index – the Manufacturing and Services sectors are expected to produce slightly better readings than the previous month. These results will be interesting taking into consideration the Empire State Manufacturing Index numbers last week were bad. The PMI statistics will provide some impetus to the broad Forex market.

Wednesday, 24th of April, Australia Consumer Price Index – inflation data is anticipated to be higher than the previous month’s results. While stronger inflation is not something that will make consumers happy in Australia, stubborn price results may keep the AUD/USD slightly steadier. The currency pair is traversing values last seen in the second week of November 2023 as of this writing.

Thursday, 25th of April, U.S Advance Gross Domestic Product and Price Index – these numbers are certain to have an impact on all financial assets. A decline in growth is anticipated in the U.S compared to the previous month’s result, but the Price Index is expected to show an increase. Jerome Powell having come out last week and said inflation is causing uncertainty within the Federal Reserve, may have a bit of inside knowledge regarding this GDP inflation number and ‘tipped his hand’. If this inflation gauge is higher than anticipated it could pour fuel onto the already volatile USD. All Forex traders need to pay attention to these results and be prepared with solid risk management.

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USD/JPY One Year Chart as of 21st April 2024

Friday, 26th of April, Bank of Japan – in what has already proven to be a couple of weeks filled with drama for the USD/JPY, the BoJ will step into the limelight. During their last central bank meeting the Bank of Japan increased the Policy Rate to 0.10%. It was the first time the BoJ hiked interest rates in 17 years. The USD/JPY is trading at values last seen in June of 1990. The Nikkei 225 has come off of recent record heights, but the famed Japanese stock index is also trading within territory seen in January of 1990. Business activity via the Core Machine Orders and the Tertiary Industry data last week were stronger than anticipated.

The Bank of Japan may want to maintain a weaker USD/JPY equilibrium to continue fostering domestic growth. However, many financial analysts have been calling on the BoJ to become more hawkish regarding monetary policy. The interest rate decision is certain to cause immediate volatility before and after the Policy Rate is made public. USD/JPY traders need to be prepared for fireworks. A slight raise of the interest rate seems to be needed, but after the March hike the BoJ may prove conservative again. The 34 year lows now being seen in the Japanese Yen are astonishing.

Friday, 26th of April, U.S Core PCE Price Index, and Inflation Expectations – the data from the government, and the reading from the University of Michigan will close the curtain on a big week of economic statistics for all traders. The USD will react to these outcomes. It should be noted the previous Inflation Expectations data from the University of Michigan caused a storm in Forex when it came with 3.1% gain.

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AMT Top Ten Miscellaneous Postings for the 5th of April 2024

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Postings for the 5th of April 2024

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10. Petrichor: The pleasant smell after a rain has fallen following a long dry spell which elicits earth’s fragrance. The Fed is likely hoping for this sensation via ‘weaker’ Non-Farm Employment Change numbers today. In December the Federal Reserve spoke about data signals needed in order to cut interest rates. If jobs statistics are stronger than anticipated, there will be no ‘petrichor’ for the Fed.

9. Underreported: Five engineers from China on their way to work for the Dasu dam project they participated, were killed in a ‘suicide’ terrorist attack in Pakistan on the 26th of March. Terror attacks in Pakistan on Chinese involved with infrastructure ‘Economic Corridor’ work have been increasing.

8. Qubits: Microsoft and Quantinuum recently announced they have made breakthroughs regarding quantum computing research reliability. Results have shown 14,000 ‘test routines’ without errors. The emergence of quantum technology approaches.

7. Intrinsic Value: Cocoa is near 9640.0 USD per metric ton as of this morning and remains speculatively energetic. Bitcoin is slightly below 67,000 USD and continues to ‘beat’ the notion that intrinsic value is important.

6. Precious: Gold prices have ‘fallen’ below 2300.00 USD per ounce, and is near 2289.00 for the moment, but the metal is shining as crowds admire its ability to create a safe haven.

5. WTI Crude Oil: Middle East news is rumbling and hyperbole is resonating, the price of the commodity is over 86.40 USD per this writing. A calm weekend, and peaceful end to Ramadan this coming Tuesday might help calm nerves. Higher oil prices will not help global inflation.

4. Forex: The USD/JPY has started to experience waves of volatility and has recently challenged long-term highs. Bottom line is the notion that large players are positioning for today’s U.S data which will affect all financial assets as USD centric power resounds.

3. Equities: The U.S major stock indices are beginning their day near lows not seen since the 15th of March for the Dow 30, and the 19th of March for the S&P 500 and Nasdaq Composite. Nervous?

2. Bonds Watch: U.S Treasuries need to be monitored as the 5, 7, and 10-Years Notes respond to nervous investors and fears of a new ‘inversion’. Having come off of high yields a couple of days ago, doesn’t mean all is well as values languish near late September 2023 technical realms.

1. Data: Recent chatter from many Fed FOMC members have created anxious investors. Vivid reactions will occur after the Non-Farm Employment Change and Average Hourly Earnings. Bluntly, today’s jobs reports are crucial and the Fed would like the results to be weaker than anticipated in order to consider cutting interest rates. However, if hiring comes in stronger, it would be a sign of a resilient U.S economy and would ignite more USD strength. The first half hour following the jobs numbers may look counter-intuitive regarding price action as financial institutions adjust their trading positions.

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AMT Top Ten Miscellaneous Notions for the 8th of March 2024

by with No Comment AMT MarketsArtificial IntelligenceFeatured Highlights

AMT Top Ten Miscellaneous Notions for the 8th of March 2024

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10. Social Credit Score: George Orwell in our Age of the All Knowing State via public cameras using facial and body language recognition, along with listening devices that can gather voices and other sounds would chill him to the bone.

9. French Revolution: It was ‘wrong’ to say madame and monsieur after the ‘ancien regime‘ was replaced, instead the expression ‘citizen’ (citoyen) was invoked. Not using the proper words could bring the guillotine into your future.

8. Japan: Nikkei 225 has come off the top, but remains highly valued. GDP numbers will come from the nation next Monday, and the BoJ is on the calendar the 19th of March.

7. Tech Espionage: Linwei Ding, a Chinese national, who worked for Google as a software engineer has been accused of stealing information regarding supercomputing and artificial intelligence. The U.S government has filed criminal charges against Ding in San Francisco, California.

6. Central Banks: Federal Reserve Chairman Powell per his testimony in Washington D.C remained cautious, saying he wants data to confirm inflation is eroding. The ECB yesterday also voiced care while trying to sound optimistic about economic conditions which remain lackluster.

5. FOMO: ‘Fear of missing out’ is being seen in many asset classes including cryptos and equities. Day traders while speculating should remain realistic and practice solid risk management.

4. U.S Indices: Apex heights persist as the S&P 500, Nasdaq 100 and Dow Jones 30 receive massive inflows of capital.

3. Gold: Record prices have been attained in the precious metal as speculative elements have pushed value above 2160.00 USD as of this writing.

2. Forex: The USD has seen weakness re-emerge the past handful of days as the ‘masses’ have seemingly energized again upon the notion of a change to the Federal Funds Rate.

1. U.S Data: Non-Farm Employment Change and Hourly Average Earnings statistics will be published today, either helping confirm or confront financial institutions behavioral sentiment. Weaker hiring and a diminishing of wage inflation is anticipated. Will it happen? Forex, U.S Treasury yields and equities will react.

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Forex: Powell, ECB and U.S Jobs Numbers as Gold and Oil Run

by with No Comment Behavioral SentimentCommoditiesFeatured Highlights

Forex: Powell, ECB and U.S Jobs Numbers as Gold and Oil Run

Day traders and investors received a dose of optimistic ‘news’ last week as U.S economic data came in weaker than expected. While Forex certainly proved choppy as anticipated, the USD has shown signs of stability and perhaps has created a durable resistance level up above regarding its potential value looking into the mid-term.

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Gold Six Month Chart as of 5th March 2024

A potential telltale sign regarding the USD in Forex is the current price of Gold which is testing highs and as of this writing is near 2115.00 USD. While below the speculative heights of early December, the precious metal is above prices seen in late December when the USD was being sold heavily. The value of Gold is a rather solid barometer regarding outlook for behavioral sentiment in Forex. A weaker USD translates into a higher Gold price in many cases.

U.S Treasury yields have also decreased slightly over the past handful of days. And while U.S equity indices are within sight of record values, traders should monitor developing news regarding U.S regional banks and concerns about New York Community Bancorp (NYBC). For the moment it appears investors have not turned too nervous when considering the bigger picture of stock markets. Perhaps last year’s regional bank crisis has made investors in equity indices feel immune to fears of contagion stemming from bad commercial real estate lending. Or perhaps many folks are marching along merrily and refuse to pay attention for fear of missing out when their associates continue to parade into the indices.

The cryptocurrency market has come out of its deep freeze and sunshine is pervading the mindsets of speculative gamblers in crypto assets. U.S run ETFs are raising a lot of money. Folks have driven the market sky high again in the digital asset Bitcoin and its fellow travelers like Ethereum, Binance Coin, and there have been signs of pure casino like wagering in Dogecoin and Shibu Inu. Be carefu if you are considering dipping your toes into this ‘market’. Volatility and changes of sentiment can happen in the flick of an eye.

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USD/JPY Six Month Chart as of 5th March 2024

Monday, 4th of March, Japan Capital Spending – a huge jump of 16.4% was reported yesterday. This points to better economic sentiment. The Bank of Japan has been getting a lot of attention the past handful of months because some financial institutions expect the BoJ’s monetary policy to begin changing. The USD/JPY remains near important resistance levels, but below the highs of last October and November 2023 values. Mid-term speculators may be leaning towards bearish sentiment in the currency pair, but a trend lower has not been established yet.

Tuesday, 5th of March, U.S Service PMI via ISM – last week’s growth and inflation data from the U.S was less than expected. While the U.S economy has shown rather stubborn growth, the American economy may be showing signs of slowing. Today’s reading is expected to come in below the previous month’s outcome.

Wednesday, 6th of March, U.S Federal Reserve Chairman Powell – the Fed chief will testify before the Senate via the Semi-Annual Monetary Report over a two day span. Because it is an election year a rather aggressive amount of questions will be asked. However, Powell is a skilled speaker and it unlikely he will be rattled by political rhetoric. Of interest will be any comments regarding inflation, this as the Fed Chairman is asked for insights regarding the Federal Funds Rate outlook. While this testimony in Washington D.C is usually a polite get together, the notion that some politicians may try to score points will make this a potentially important calendar event for investors to pay attention regarding financial market gyrations. Powell is expected to remain cautious regarding his answers.

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WTI Crude Oil One Year Chart as of 5th March 2024

Wednesday, 6th of March, U.S Crude Oil Inventories – last week’s U.S supply report posted increased results, yet the price of WTI Crude Oil jumped the end of last week. The value of the commodity remains within the lower part of its one year range and should be watched. Recent speculative action has shown some buying momentum. The price of energy is a big component within global inflation and should be watched as the 80.00 USD Crude Oil level is challenged.

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EUR/USD Six Month Chart as of 5th March 2024

Thursday, 7th of March, European Central Bank Main Refinancing Rate – once again the ECB is expected to not act. The question is if financial institutions may try to send the European Central Bank a message because of its ‘inaction’ as inflation remains stubborn in Europe and growth hard to achieve. The EUR/USD has returned to value above the 1.08000 mark again, but visions of a stronger EUR have been hard to attain. The combination of the ECB Monetary Policy Statement and Press Conference, as Fed Chairman Jerome Powell is addressing politicians in Washington D.C could make for an interesting day of volatility in Forex.

Thursday, 7th of March, U.S State of the Union – President Joe Biden will deliver his address to Congress.

Friday, 8th of March, U.S Non-Farm Employment Change and Average Hourly Earnings – weaker jobs numbers and diminishing wage escalation are expected. U.S economic data last week came in below estimates. This report will be a solid barometer for financial institutions. While the work force numbers in the U.S are said to be tight – meaning there is full employment – layoffs have certainly been taking place in some sectors. Also worth paying attention to in the ‘back pages’ of the report, will be the amount of average hours worked by employees which have seen a statistical decline emerge.