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EUR/USD: Volatility is Visiting Again upon the Trump Effect

by with No Comment AMT MarketsFeatured HighlightsForex

EUR/USD: Volatility is Visiting Again upon the Trump Effect

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EUR/USD One Month Chart as of 3rd of March 2025

The EUR/USD bounced slightly higher in early trading this morning, this after Friday’s burst lower when nervousness was ignited by the loud outcome (and lack of a resolution) via the Zelensky and Trump meeting. However, after achieving some buying impetus to start today, the EUR/USD is running into nervous headwinds as concerns remain evident.

This Thursday the ECB is expected to cut another 0.25 from its Main Refinancing Rate. The difference between borrowing rates from the ECB and Fed will be significant if the ECB does lower costs. E.U economic data warrants the dovish policy, while concerns about stubborn U.S inflation persists. And President Trump will have something to say about the Federal Reserve’s policy too. Trump wants the Fed to lower the Federal Funds Rate.

The U.S will issue its Non-Farm Employment Change numbers this Friday. And many Fed members will be speaking at various engagements this coming Thursday and Friday which is certain to get attention. Financial institutions will certainly be listening for clues regarding the potential of shifting viewpoints regarding the Fed’s current stance which is cautious from FOMC officials.

Which brings us back to the current value of the EUR/USD and behavioral sentiment which is being generated by a deep sea which is not clear. The EUR/USD into early last week was showing signs of bullishness, this as folks piled into the notion the currency pair was in oversold territory. The ability of the EUR/USD to remain above 1.04000 today should be watched. While there has been upside early this morning, European traders and full market action will begin to kick off in about one hour.

Day traders need to know the potential rate cut cut from the ECB this coming Thursday has been anticipated and factored into the EUR/USD already. Leaving the currency pair ready to be influenced by USD centric perspectives, and Ukraine concerns which are unresolved. The U.S equity indices should be watched too via their less than inspiring results the past week. While many financial institutions believe the EUR/USD should be valued higher, this may be based on instinctive bias instead of fundamental reasons.

Economists are great for insights, but it is skittish sentiment which is driving the markets. Volatility is likely and the price range of the EUR/USD could prove tactically challenging and wide. If cautious attitudes in financial institutions create calm, the EUR/USD could produce durable support levels, which could be used for upside wagers. Speculators will have opportunities in the currency pair this week, but risk management will be essential to protect against sudden gusts caused by swirling Trump rhetoric.

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A More Aggressive Sounding ECB Could be Wishful Thinking

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

A More Aggressive Sounding ECB Could be Wishful Thinking

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EUR/USD Three Month Chart as of 30th January 2025

Will an interest rate cut by the ECB spark near-term buying in EUR/USD today? Financial institutions want news they have anticipated, day traders need to understand this dynamic.

The Federal Reserve stood in place yesterday almost acting as if it is afraid of its own shadow. No one was surprised the Fed did not cut the Federal Funds Rate. The Fed insisted inflation remains slightly elevated, it also said it thinks most of the worst employment data has been seen. What it did not say was that it remains in a quandary regarding the potential affects of President Trump’s policy on the U.S economy. The Fed wants to stay away from this debate. They also likely understand Donald Trump will bring up the subject himself. Trump wants the Fed to cut U.S interest rates more.

On the other side of the coin today stands the European Central Bank, which is anticipated to cut their Main Refinancing Rate by another 0.25, this to the 2.90% level. Financial institutions have certainly factored an interest rate cut from the ECB into the EUR/USD already. If there is no cut, this would cause an immediate reaction and likely a bad one against the EUR.

However, if the ECB acts as expected and cuts their rate this might actually spur on some near-term positive thoughts about the EUR and create some buying momentum. But for the move to be sustained and stronger, as outlandish as it might seem, what financial institutions will want to hear is that the ECB understands the E.U faces ongoing tough economic conditions and will remain dovish.

The problem with an overly aggressive attitude by the ECB today is that this is not anticipated. Yes, the rate cut of 0.25 is being counted upon, but the ECB and Fed are not exactly bastions of pro-active policy change. The ability of the EUR/USD climbing above the 1.05000 ratio last Friday and into Monday of this week was a signal financial institutions believe the EUR/USD is oversold, but they want to see more concrete steps taken. Doubts about what the ECB will say today has likely led to the 1.04000 level again being tested.

It may seem counterintuitive to believe that interest rate cuts from the ECB and a overly cautious Fed will help the EUR/USD achieve a bullish footing, but behavioral sentiment regarding mid-term outlook is crucial. Carry trade folks may say that if the ECB were to promise another cut today after their actions taken now, that this would create too large a difference between the ECB and Fed borrowing rates. This may be correct, but pro-active policy is something financial institutions would like to see. Day traders should be very careful today.

The EUR/USD hovering near 1.04000 is a signal that financial institutions will certainly react, there will be volatility in the coming hours. A rate cut from the ECB today will be the first ray of hope regarding a stronger EUR. However, unless the European Central Bank sounds like they will remain vigilant and are considering another potential cut sooner rather than later, the EUR/USD could quickly start to become choppy again.

The EUR/USD is essentially occupying a price range right now that it traded one month ago. Sentiment remains jittery. And President Trump will be watching and his comments which could come at anytime regarding the Fed, interest rates, potential tariffs and sanctions will create vulnerabilities for Forex and financial institutions in the days ahead.

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USD/JPY: Bank of Japan Actually Does its Job: Raises Rate

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

USD/JPY: Bank of Japan Actually Does its Job: Raises Rate

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USD/JPY Five Day Chart as of 24th January 2025

The Bank of Japan actually raised its Policy Rate by 0.25 to 0.50% this morning. The move was done while the central bank stated the Japan economy is improving. The Bank of Japan also noted that the implications of U.S tariff policy are not completely known, thus it is acting on existing facts. The action by the BoJ created selling in the USD/JPY and is a healthy sign.

While the U.S Federal Reserve has taken on a cautious tone, President Trump has started to signal via rhetoric that he would like to see U.S interest rates lowered. The Fed and President Trump may find that they are in disagreement regarding mid-term policy and Forex traders shouldn’t be surprised if the debate escalates. The USD/JPY is trading near the 155.500 vicinity with fast price action at this moment. The ability to sustain values below the 156.000 level will be important technically if maintained. A fall below the 155.000 ratio may indicate more selling should be expected.

While financial institutions globally remain nervous about U.S economic policy regarding trade negotiations, Japan for the moment is out of the spotlight regarding tariff implications. The USD/JPY was trading near the 153.000 area on the 17th of December and it will be intriguing to see if large players use this level as a target in the coming days.

Retail traders should practice solid risk taking tactics and conservative leverage. The ability of the Bank of Japan to increase its interest rate, while the U.S Fed is in the midst of considering no changes to the Federal Funds Rate is a potentially solid sign for USD/JPY bearish attitudes.

Global Forex conditions remain choppy, but there has been some buying of the EUR/USD and GBP/USD produced recently. Next week talk of tariffs against China, Canada and Mexico will heighten, but traders need to understand the tough sounding talk from Trump is part of his negotiation tactics. While he certainly seems intent on carrying out his mandate, he will also be open to finding a way to create agreements.

Behavioral sentiment is in charge of Forex for the moment. Outlooks remain unclear, but USD centric strength may be traversing within the apex of its highs in many cases.

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Federal Reserve Expected to Sound Guardedly Cautious Tmrw

by with No Comment Behavioral SentimentCentral BanksFeatured Highlights

Federal Reserve Expected to Sound Guardedly Cautious Tmrw

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EUR/USD Five Day Chart as of 17th December 2024

Large traders are clearly bracing for the Fed tmrw as Forex produces volatile tight ranges. A rate cut is expected, but cautious Fed rhetoric will likely follow.

Forex has been a dangerous wagering ground for retail traders since the end of September. Financial institutions which clearly were betting on a more dovish Federal Reserve starting in early summer becoming a central theme into 2025 have been proven half right, this as the Fed has cut interest rates and is expected to do so tomorrow. However, being half right leaves the door open to also being half wrong, and financial institutions have reacted to this by becoming aggressive buyers of the USD since late September as perspectives have changed. The strong USD trend the past two months plus has hit some speculators hard.

The election of Donald Trump added a strong dose of impetus for USD buyers, this as the President-elect’s tough rhetoric regarding tariffs caused reactions and fear of unknown consequences. In the past couple of weeks more tranquil Forex trading has emerged and the USD finally started to give back some of its gains, yet the USD versus most major currencies, like the EUR/USD, remains within the the stronger elements of it range. While the Fed is expected to lower its Federal Funds Rate tomorrow by 0.25 to 4.50% tomorrow, traders need to remember this has been priced into Forex already. Tranquil trading the past two weeks indicates financial institutions have readjusted their outlooks to the incoming White House administration.

Now it is time to see if the U.S Federal Reserve has started to adjust their outlooks to what a Trump Presidency means. And financial institutions are keen to better understand the outlook of the U.S central bank. Inflation numbers while traversing lower are still rather stubborn and this may will not help the Fed’s mid-term mindset regarding interest rate cuts. GDP in the U.S has remained steady, and there is the potential the economy in the States will improve under Trump. Unemployment numbers while showing signs of weakness have not been terrible either. So while the Fed’s current Federal Funds Rate is higher than normal taking into consideration the historic average the past ten years, they still may not feel they have enough ability to cut interest rates too much more without sparking inflation.

A January rate cut seems unlikely at this time. If the Fed does sound guardedly cautious tomorrow, retail traders may see the USD get initially weaker due to the Fed rate cut, but then see a storm emerge and USD centric strength reappear all in the same day – perhaps in the span of minutes. Speculators need to understand that financial institutions have already baked tomorrow’s interest rate cut into the cake. So it isn’t the rate cut tomorrow that is important if it happens (if it doesn’t then that’s another story); it is what the Fed says and traders should expect them to be very cautious – because per the recent trading of the USD and a barometer it appears financial institutions are bracing for a more vigilant Fed.

Just like he has with many folks he views as uncompromising before, Donald Trump may begin to feel Federal Reserve Chairman Jerome Powell is not on his side regarding interest rate policy. If the Federal Reserve chooses to sound hesitant to cut interest rates in early 2025, it will be rather intriguing to see President-elect Trump’s response. Could a confrontation between the White House and Federal Reserve be in the cards over the next six months?

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Forex: Trump Effect and Reasonable Trading Caution for All

by with No Comment Behavioral SentimentEconomic CalendarFeatured Highlights

Forex: Trump Effect and Reasonable Trading Caution for All

The Forex market the past two months has created a profoundly stronger USD against many major currencies. The combination of late September intrigue regarding U.S Federal Reserve outlook, then nervousness about the approaching U.S election, followed by the subsequent results have been a dumpster fire for many speculators looking for a sustained return to USD centric weakness. Hopefully risk taking tactics have included a solid dose of caution.

This week’s Non-Farm Employment Change numbers scheduled for Friday may give financial institutions a moment to focus on economic data instead of President-elect Donald Trump’s loud pronouncements, but the effect may prove to only be momentary. It isn’t data that is driving Forex for the moment it is nervousness and fear of the unknown.

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USD/BRL Three Month Chart as of 3rd December 2024

While many financial institutions and speculators trade only the major currency pairs, taking a look at the less obvious and more infrequently transacted major currencies may provide retail traders additional perspectives regarding the fragile nature of Forex. Many nations and large institutions are demonstrating concerns about possible sea changes to U.S foreign economic policy. Yes, the EUR/USD, GBP/USD and USD/JPY have all seen volatility via USD strength the past two months, but price velocity in the USD/BRL, USD/RUB, and USD/INR may be equally intriguing. And prove that mid-term forecasts (or lack of them) are causing bedlam for all.

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USD/RUB Three Month Chart as of 3rd December 2024

While it is more than probable calmer heads will start to be seen in Forex and weakness eventually will return to the USD, trying to pick the exact moment this is going to happen remains a guessing game. Financial institutions via evidence in current Forex pricing remains rather cautious regarding their cash forward commercial enterprise. President-elect Donald Trump has certainly been dealt with before and his negotiation style is that of a businessman, it is not a coincidence that some global leaders who do not exactly see eye to eye with Trump are giving him respect because they understand he will act upon threats if not dealt with fairly.

Trump’s recent brief rhetoric regarding BRICS and the organization’s public consideration of creating a new currency to compete with the USD did not go unnoticed this weekend. Critics may want to proclaim Trump’s threats as belligerent, but BRICS is free to create a new currency still if they wish. While Trump cannot stop the birth of a BRICS currency, he can certainly try to initiate actions (via sanctions) against nations that attempt to create a new unified currency which tries to curtail the dominance of the USD. It would certainly help Trump’s bargaining position and the USD also, if better fiscal policy is practiced by the U.S Treasury and government.

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USD/INR Three Month Chart as of 3rd December 2024

It needs to be pointed out that Trump’s warning to BRICS may not be needed. Even though the organization may be able to create a currency based on a commodities backbone, the lack of trust many financial institutions and nations would feel towards a non-transparent fiat currency powered by the fiscal monetary policies from the likes of Russia, China, Brazil and South Africa remains a difficult sell. Until many changes happen domestically within these nations via governance, creation of a BRICS currency remains wishful thinking.

Getting back to the big picture and the volatility recently seen in Forex. While the major currencies teamed against the USD have certainly faced hectic conditions, the fluctuations have not been unexpected. Day traders need to understand the month of December is likely going to remain choppy and see a test of technical support and resistance levels that are wide and full of fast reversals.

The question for the EUR, GBP, and JPY is if most of the negative inputs into these currencies has been factored into value. The suspicion may be yes, and that strength may rightfully appear in these big three sooner rather than later. However, the approaching holiday season and potential bluster from President-elect Trump will not make this a comfortable or easily wagered avenue.

Short-term retail traders looking to take advantage of the bloodbath created in Forex the past two months who seek opportunities should focus on perceived targets which aren’t overly ambitious. The coming U.S jobs data this Friday may allow the U.S Federal Reserve room to cut the Federal Funds rate on the 18th of December by another quarter of a point. As a point of attention, the European Central Bank will announce their Main Refinancing Rate on the 12th of December. The ECB’S actions may be a solid clue regarding the Fed’s approach to upcoming policy.

However, even if an interest rate cut were to take place via the Federal Reserve, it is likely the cut has already been factored into Forex. Which also highlights the high degree of nervousness that exists because of fears which permeate due to Donald Trump’s tough negotiation stances which have been made public. Meaning those who are looking for USD centric weakness to emerge still need to rely on a shift within behavioral sentiment to occur that is not generated because of the Federal Reserve. Nations need to show a willingness to amend existing trading agreements with the U.S, allowing for changes to internal policies regarding exuberant price duties they place on U.S goods in their own countries.

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Forex: The Art of Not Making Sense and Accepting Price Values

by with No Comment AssetsBehavioral SentimentFeatured Highlights

Forex: The Art of Not Making Sense and Accepting Price Values

Retail traders are likely learning the hard way that attempting to trade in Forex for the moment is more than dangerous, it is expensive. The U.S Consumer Price Index numbers yesterday met expectations, which essentially allows the Federal Reserve to remain in a cautious dovish stance. However, after an initial show of USD weakness upon the data in many FX pairs, USD centric strength quickly returned.

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USD Cash Index Six Month Chart as of 14 November 2024

Short and near-term trading for speculators who do not have deep pockets and are suffering from whipsaw movements are creating the need to take a step back. As many major currencies have suffered losses against the USD since late September, the tendency is to likely think a reversal is going to develop sooner rather than later. However, until financial institutions become comfortable with the notion President-elect Trump’s policies aren’t going to harm economic prospects in a variety of nations regarding tougher trade agreements, risk adverse trading is going to remain a key in Forex.

Yes, at some point the USD will start to give back some value, but timing the moment this is going to start and become sustained for day traders is simply betting. Financial institutions are feeling anxious about their commercial forward positions in Forex too, which will continue to create volatility for all trying to predict where the USD will be mid-term. Federal Reserve policy may actually be able to deliver a 0.50 basis point total cut over the next few months, but this notion has had almost no impact on USD strength short-term. Perhaps financial institutions do not feel the Fed will be that dovish through February, but if inflation remains tame the Federal Funds Rate still has room to decrease.

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Gold Three Month Chart as of 14 November 2024

Today’s Producer Price Index inflation reports will be watched, but like yesterday the results are unlikely to be a key which will suddenly ignite strong reversals in Forex. In the meantime traders need to practice solid risk taking tactics and patience. Retail Sales figures will come from the U.S on Friday, but again day traders should expect financial institutions to remain risk adverse until there is an event which changes their cautious mindsets.

Gold is noteworthy because it has struggled since early November. There is the possibility the precious metal has turned lower because investors feel more sure about their long-term bets in the U.S equity markets for a moment, but that is likely wrong. It could also be argued speculators are cashing out winnings they have made the past handful of months. The point being that explanations for price movements are tenuous. False narratives abound. Fundamentals like behavioral sentiment are shifting because new economic policies from the U.S are going to develop and market participants want greater clarity.

Like the major currencies suffering significant declines versus the USD, the value of gold can be argued, but the market is telling us what participants are willing to pay for assets whether we agree or not. Let there be no doubt that the highs being produced in U.S Treasury yields which are near early summer values, the USD Cash Index reversing towards technical levels seen in early July, gold recently losing value, and U.S equity indices being near all-time highs makes it particularly difficult for predictions regarding what is next. Except to say the Trump victory in many ways has sparked a buy American parade for the moment. If you want to bet against the trends you are free to do so, but behavioral sentiment is proving once again the king of the hill.

While the broad markets may not feel like they are making much sense to some, as traders we need to be able to put our bias to the side and accept the markets as they are, not what we think they should be. There is a significant difference between near-term and long-term targets. Day traders need to understand they are wagering in markets that will remain dangerous for a while. Nothing is guaranteed, but the idea that U.S equities may continue to rally into the New Year is being wagered upon by larger players and they might be proven correct.

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Return to Normal Market Conditions and a Trump Outlook

by with No Comment AssetsBehavioral SentimentFeatured Highlights

Return to Normal Market Conditions and a Trump Outlook

Retail speculators can now expect a return to calm and clear financial market outlooks, knowing that potential influences from new U.S policies will start to be considered. With the U.S elections in the rear view mirror and a Trump mandate delivered by many U.S voters, global financial institutions and traders will again be able to focus on a combination of technical perspectives, current behavioral sentiment and outlook.

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USD Cash Index Six Month Chart as of 10 November 2024

Some technical traders may believe behavioral sentiment has nothing to do with the long-term prospects of studying charts, but price action last week in FX and equities clearly showed why traders must be attuned to storms created by human emotions. Risk adverse trading has been prevalent since the end of September. A glance at the six month USD Cash Index demonstrates the extent of behavioral sentiment causing volatility the past handful of months. After believing the U.S Federal Reserve was going to become dovish which propelled the USD lower in many Forex pairs in early July, financial institutions expressed concerns about political outlook the past handful of weeks as a lack of clarity started to shroud their perspectives. USD centric positions have powered Forex.

And now that there is a Trump administration coming, and the U.S Fed has remained cautiously dovish this past Thursday, financial institutions may exhale with relief. The election on November the 5th has delivered a clear message regarding the potential for changes to U.S administration mandates regarding trade. Whether a stronger U.S economy is attained because of these hopes is not the question, it is the perception new policies will be initiated which try to deliver results which have been promised. Yes, promises can be broken.

However, the ability to believe changes are coming will affect behavioral sentiment. The Trump soundbites may prove to be rather weak in the future, but there is a chance he will also get things done regarding stronger trade agreements which protect U.S business enterprise and manufacturing. Folks can argue until they are blue in the face regarding the prospects of all things, but the U.S major equity indices rising like a rocket ride in the middle of last week is clear evidence that many believe the prospects for U.S corporations is better. No matter if it is only hopes about tax laws changing, less regulation, and better U.S trade agreements, investors are clearly betting on optimistic outlooks for the mid-term.

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Dow Jones 30 One Month Chart as of 10 November 2024

Improved attitudes are great for the prospect of financial institutions, but traders still have to certainly protect their positions against volatility developing. Markets should start to return to tranquil conditions in the days ahead. U.S data will come this week which will be important via the CPI numbers on Wednesday and PPI figures this Thursday – the combination of these inflation reports will be important. Friday will see Retail Sales from the States.

The return to data as a guideline for financial institutions teamed with the Fed’s rate cut this past Thursday may be an ointment for retail traders who seek a return to normal conditions. Nervous behavioral sentiment could remain a factor in the coming days as people adjust their outlooks to a Trump White House, but the coming week should be relatively quiet regarding surprises.

It isn’t a question of liking or disliking the outcome of the U.S election, it is a question about how behavioral sentiment will now be affected. While some bring up potential tariffs as a major risk for the U.S and global economy, we have been down this road before with Trump. The risk of inflation if trade disagreements flourish should be taken seriously, but Trump has dealt with China in the past and both sides did find a way to do business in many respects. China is probably worried about Trump being in the White House again, but they likely have a gameplan for the tough business discussions ahead. The experience of having dealt with President Trump before allows China and others to know what they may face this time and empower them to be prepared.

It should be noted that Trump has shown in the past a tendency to enter negotiations with a difficult offer and permitting the other side to counter. Trump then might turn down a proposal, but often shows he is open to discussing things further and reaching a compromise. And that is the crucial word – compromise. It is about business and geopolitics. Financial institutions have dealt with a Trump White House before. This time around there is a hope Trump’s naming of a White House cabinet will not be as messy an affair as it was the first time.

The naming of Susie Wiles as the White House Chief of Staff last week looks like a good first step, also having strong Republican leadership in the Senate and House of Representatives may make things easier. While some are worried about a slew of loud rhetorical stances by Trump, perhaps pragmaticism will be practiced. And based on that rather optimistic viewpoint, retail traders may also feel businesslike conditions are ahead and that the financial markets will be a safer place to pursue speculative wagers again in the near and mid-term.

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AMT Top Ten Miscellaneous Votes for the 4th of November

by with No Comment AssetsBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Votes for the 4th of November

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10. Priorities: Not to dismiss the execution of beloved Peanut the Squirrel by New York authorities recently, but lets reflect on the fact that this little fellow made international news while wars are raging, and nearly 300 people in the U.S are dying from drug overdoses per day. Social media is rather powerful.

9. NBC: Kamala Harris appeared on Saturday Night Live for roughly 90 seconds this weekend, this created criticism and questions about unfair airtime for the Vice President. SNL is lucky to get more than 5 million viewers per episode on average. To try and apologize for the potential trouble, NBC then gave Donald Trump free commercial airtime twice yesterday, once during a NASCAR race which on average attracts over 3 million viewers, and on a Sunday night NFL broadcast which averages sometimes up to 22 million viewers.

8. Saber-Rattling: There is a potential Iran is waiting on the outcome of the U.S vote for President before undertaking more military actions. Deciding if and how they are going to launch another attack on Israel, depending on who wins the U.S election because of the potential ramifications is likely part of their military strategy.

7. BTC/USD: Bitcoin as of this writing is trading near 68,500 USD. The digital asset continues to bounce around rather intriguing resistance. On Tuesday of last week Bitcoin traded near 73,500 momentarily, while the highs are certainly noteworthy, support for the speculative asset has been around 66,000 since the middle of October. There are reasons to suspect Bitcoin will display a large amount of volatility this week, particularly when the new U.S President is known.

6. Forex: As of this writing the USD/JPY is slightly below 152.000, the EUR/USD is around 1.09000, the GBP/USD is near 1.29650. The question is where these currency pairs and other major FX assets will be in three nights. Day traders dreaming of riding momentum via financial institutions need to understand the equilibrium of risk and reward. In other words, the same amount of money you can make, is likely the same amount of money you can lose. Risk management will be a life preserver for many speculators this week.

5. U.S. Data: This past Friday the Non-Farm Employment Change numbers came in wildly below the 106,000 jobs added estimate, the result of only 12,000 hired was rather shocking, but met with almost muted bewilderment. Also, the jobs numbers showed another revision lower from the previous month. Advanced GDP quarterly numbers, on Wednesday the 30th of October, also missed their estimate coming in with a 2.8% gain compared to anticipated growth of 3.0%. The U.S economy is still under stress.

4. Barometers: Risk adverse trading has been widespread the past handful of weeks. While gold has reached new highs and is slightly below the 2,750.00 mark for the moment, one month from now will be a telltale for gold and many assets. Since the end of September a number of narratives have been heard trying to explain the results seen across the board, but the simple answer is caution has entered the markets. U.S equity indices are still flirting with highs, even as they have suffered downturns in recent trading. WTI Crude Oil is near 71.50 USD per barrel. Gold, U.S equities and WTI Crude Oil will react to the outcome of the U.S election and serve as solid behavioral sentiment indicators in one month when compared to current prices.

3. Federal Reserve: If last week’s U.S economic data had been delivered without the fanfare of the U.S election approaching, Fed observers would likely be anticipating a dovish sounding FOMC Statement coming on the 7th of November. Instead, the USD has remained rather strong as risk adverse trading has been demonstrated in the broad markets. The Fed is certainly in a position to cut the Federal Funds Rate by another 0.25 basis points, some could even argue for another 0.50% cut. However, the Fed is likely to cut interest rates by a quarter of a point and sound rather cautious as they too read the landscape in the wake of the U.S voting results. Mid-term outlook from the Fed will be scrutinized this Thursday.

2: Nervousness: Day traders who decide to participate in the broad markets near-term may also enjoy walking outside and looking at approaching storms and dreaming about the fury about to come. Being anxious before and during large risk events when outcomes are unknown is a survival instinct. Speculators need to protect themselves over the next couple of days. Tranquil trading in all major assets may appear, but as tomorrow grows long assets will begin to percolate and by Wednesday almost all financial markets will be boiling. While this is certainly being hailed as the most important week of the year because of the U.S election and the Federal Reserve, it is also a very dangerous time to be trading. Those with limited funds may want to hunker down in a safe place and watch the markets create bedlam over the next 48 hours.

1. U.S Election: The vote is less than one day away when old standards are considered. However, more than 72 million votes have been cast early in the U.S already. That’s more than 45% of the total U.S vote during 2020, when 158,434,567 votes were counted. While the media bangs the drum regarding the incoming results tomorrow, it is important to note that many Americans and global observers are merely waiting for the final results to be announced. The end of the election campaign is nearly upon us, now financial institutions and traders await clarity. Wednesday the 6th of November is going to be an interesting day for the markets.

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AMT Top Ten Miscellaneous Frights for the 28th of October

by with No Comment BaseballBehavioral SentimentFeatured Highlights

AMT Top Ten Miscellaneous Frights for the 28th of October

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10. MLB Concern: Baseball executives are hoping the Yankees can start to make the World Series more competitive this evening. The Los Angeles Dodgers have won the first two games of the championship battle. Significant hopes for a drama filled, seven game World Series would be dampened badly if the Yankees do not win tonight. Television ratings which were expected to be high could suffer appreciably if the Yankees go down three games to none. A non-competitive championship would mean a loss of revenue.

9. Israel and Iran: The Middle East saga is at number nine, and hopefully doesn’t become number one. A dangerous game of poker is being played by the participants. If Iran decides to up the ante once again, it would be a dangerous decision, because it appears Israel has positioned itself via this weekend’s retaliation to be more aggressive if need be.

8. WTI Crude Oil: The ability of the energy to move below 70.00 USD upon this morning’s trading is a sign the Middle East conflict remains tranquil in the minds of large participants in the oil sector. However, if Iran decides to test Israel again directly, Iran may find that its oil infrastructure is vulnerable. As the price hovers below 68.00 USD during this writing, it appears buyers who bought speculative positions the past few weeks might be capitulating.

7. BRICS: The inclusion of 13 additional nations as Partner States to the international organization led by Russia, China and India shows the entity sees itself as a growing alternative geo-political force and trading sphere with real power. The West should be paying attention, but often seems like it is not concerned about the potential strength of BRICS, and instead makes believe the group is a fallacy and much ado about nothing – this is a mistake by the West.

6. North Korea: The potential of North Korean combat troops entering the Ukraine – Russia war is a dangerous notion. However, it opens the door for Ukraine and South Korea to offer surrendering deserters the possibility of being allowed into South Korea, if soldiers can prove they are not spies. Unfortunately, the temptation of desertion by enemy troops could prove to be wishful thinking because North Korean soldiers will have intense supervision at all times; the threat of being shot as a liable traitor is a likely constant menace.

5. Gold: Record values continue to be seen, the price of the precious metal as of this writing is near 2,732.00. Noted as a store of value, gold is also seen as a safe haven by its buyers. Now may be the time to consider behavioral sentiment as a main driver because of anxiousness in the global marketplace. Speculative forces are certainly involved in the move higher too. With so many risk events shadowing, it may be very unwise for day traders to bet against the rise of gold near-term.

4. U.S Data and the Fed: Advance GDP numbers will be published this Wednesday, the Core Personal Consumption Expenditures Price Index will be seen this Thursday, and on Friday the Non-Farm Employment Change statistics will be presented. Fireworks should be anticipated by day traders. The combination of these reports, the approaching U.S election, and the Federal Reserve’s FOMC Meeting decision on the 7th of November will be enough to make most analysts hearts beat faster.

3. USD/JPY: Japan’s election results today now require a coalition government because the ruling Liberal Democratic Party has lost its majority. The Bank of Japan has a meeting this Thursday and is expected to hold its BoJ Policy Rate in place. The Japanese Yen has returned to values above the 153.000 level as of this writing. While many major currencies have lost value against the USD since the end of September, the USD/JPY needs to be watched as a dynamic combination of risks abound. Political gridlock, inflation, and lackluster economic data in Japan are not ingredients which will provide financial institutions with optimism in the near-term. The historically cautious attitude of the Bank of Japan will be severely tested in the coming weeks.

2. U.S Election: There is a little more than one week to go before the Presidential vote begins. While many folks are focused on the White House, the race for the Senate looks to be a stiff competition too. Republicans are hoping to regain the majority in the Senate and retain their power in the House of Representatives. Financial institutions are apprehensive about the outcomes for Congress, which will have an important role in fiscal and regulatory management. The Democrats appear to be nervous. Noise from the campaign trail and media will become heightened over the next seven days. Top bureaucrats in offices like the SEC, CFTC, FCC and other agencies know their jobs are on the line.

1. Market Volatility: U.S economic data, the coming election, and the Fed means the next week and a half of trading in the global markets are going to be packed with violent firework displays. Day traders who do not have experience should watch from afar, because the coming price action can cause fast losses for those caught on the wrong side. Trading sentiment is fragile, this is evident via the choppy results seen in equities, Forex, many commodities, and rising U.S Treasury yields. Over stating the obvious for the moment about risk management is a public service.

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AMT Top Ten Miscellaneous Interpretations on the 13th of Oct

by with No Comment Central BanksCryptocurrenciesFeatured Highlights

AMT Top Ten Miscellaneous Interpretations on the 13th of Oct

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10. Language: The French word histoirie includes both history and story via its English interpretation. The French usage conveys the acknowledgement that history is often subjective and a story written with an opinion which may or may not be the correct narrative.

9. Subway Series: New York baseball fans will be in an uproar this coming week as the Mets play the Los Angeles Dodgers, and the Yankees face the Cleveland Guardians. The potential of a crosstown World Series will have NYC holding its collective breath. New York fans shouldn’t celebrate too soon, because the Dodgers are dangerous and the Guardians will be competitive.

8. Free Press: CBS News in the U.S has been widely condemned this past week. Video released shows ’60 Minutes’ explicitly edited an interview with Kamala Harris. Also, a recorded and ‘leaked’ staff meeting from CBS management has come to light in which Tony Dokoupil, a news anchor, is reprimanded for asking critical questions to writer Ta-Nehisi Coates.

7. Barometers: Gold went into this weekend near 2,656.00, WTI Crude Oil closed around 75.45 on Friday, and U.S Treasury yields increased this week and are now challenging values last seen in the third week of August. Intriguingly, the major U.S equity indices continue to flirt with highs. Broad market results appear to be walking a tightrope as financial institutions seem to be waiting for November and U.S election outcomes. However, long-term investors who are diversified maybe cynical of this thought, and believe buy and hold remains the best policy.

6. Buy or Sell: Negativity surrounding Boeing via workers who are on strike, layoffs, a potential corporate bonds downgrade, production delays, and court decisions are still shadowing. In December of 2023, Boeing was near 265.00 USD per share value. Prices were near 158.00 this time last year, and as of this weekend Boeing is close to 151.00. The bad news surrounding Boeing has been a thorn in the side of investors. Boeing is a major corporation in the U.S and relied upon militarily and for global public aviation. What is the downside potential for Boeing the next year compared to upside capabilities long-term?

5. Crypto: The SEC has filed charges against Cumberland DRW LLC, claiming the crypto exchange has been acting as an unregistered dealer. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26151 It appears the SEC is growing more aggressive via confrontations with U.S based cryptocurrency exchanges. The U.S election result will play a role in the future leadership and direction of the SEC, and could have an affect on cryptocurrency values. BTC/USD is near 62,700.00, ETH/USD around 2,465.00, BNB/USD about 575.00 at the time of this writing.

4. Tranquility: Stronger USD centric price action continues to create some downwards motion for other major currencies, but price velocity was not as violent last week compared to previous days since the end of September. Fragile sentiment in financial institutions is still stirring. The ECB rate decision this week will come Thursday and a 0.25 basis point cut is expected. Traders need to remember that a change to the European Central Bank’s Main Refinancing Rate has likely been priced into the EUR/USD. What needs to be heard now is ECB rhetoric and that is likely to remain guarded. Price velocity in Forex remains a danger for retail traders this coming week.

3. U.S Election: There are only three weeks left until the U.S vote. Day traders need to understand financial institutions will grow more cautious as the election approaches. Speculators may want to try and wager on the outcome of the election, but unless a definitive result is predictable beforehand, it will be hard to take advantage of political winds which are swirling. It will be nearly impossible for day traders to hold onto a position over the next few weeks unless they have deep pockets, use no leverage, and have the patience of a saint.

2. Make or Break: China will release important economic data this week. Trade Balance and Foreign Direct Investment numbers are tentatively scheduled to be released on Monday, along with New Loans reporting. This coming Friday New Homes Sales, GDP, and Retail Sales figures will be released. China is trying to stimulate the economy with billions of cash, but critics suggests this will not work. The Shanghai Composite Index is near the 3,217 mark, on the 30th of September the SSE was near 3,675. Before the China stimulus was released the Shanghai Composite was near 2,755. Bullish SSE momentum has run into headwinds since the beginning of October, China may be pressured to try and create more stimulus, but will it produce a lasting positive result? Traders caught up in the buying frenzy in late September are likely getting more nervous about declines. The USD/CNY is near 7.066. Chinese economic data should be monitored this week.

1. Interest Rates: The Federal Reserve via the CPI and PPI inflation reports still appears able to cut another 0.25 basis point from the Federal Funds Rate on the 7th of November. While the Consumer Price Index data showed a slight tick up in a few categories, Friday’s Producer Price Index met expectations via the core monthly report and the broad monthly outcome came in less than anticipated. The November interest rate decision is important regarding consistency per the Fed’s messaging the past two months, and mid-term behavioral sentiment outlook among financial institutions. U.S Retail Sales and Housing numbers will be published this week.

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Hurricanes, Wars, U.S Election and Inflation Reports Noise

by with No Comment AMT MarketsAssetsFeatured Highlights

Hurricanes, Wars, U.S Election and Inflation Reports Noise

Between hurricanes, wars, the coming U.S election what could possibly go wrong for day traders? Oh wait, the U.S will also issue their Consumer Price Index reports today to throw some fuel onto the Federal Reserve outlooks of financial institutions. As the loud headlines get attention and try to scare us, it should be noted that markets have actually behaved rather calmly this week. Perhaps volatility was already traded heavily into assets the past week and a half, and tranquility is returning. However, there is the possibility that experienced smart money has simply positioned investments and speculative endeavors, and now await outcomes via objectives in order to react.

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CBOE Volatility Index Six Month Chart on the 10th of October 2024

The Chicago Board Options Exchange’s Volatility Index (VIX) has risen since the last week of September, but remains within known realms. Gold while definitely within the higher levels of its long-term price range has ebbed lower during the same timeframes. And WTI Crude Oil while flirting with short-term highs today, actually remains within the known realms of its six month range. In other words while short-term day traders potentially get caught up in fearmongering rants and tremble, financial institutions continue to trade with an outlook that remains rather tame mid-term.

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Gold One Month Chart on the 10th of October 2024

Financial institutions were dealt a perplexing blow last Friday when the U.S Non-Farm Employment Change hiring numbers came in stronger than anticipated. However, what is not getting enough attention is another revision downwards to the previous month’s totals did happen. Today’s Consumer Price Index statistics and tomorrow’s U.S Producer Price Index results are expected to show that inflation remains under control. If the coming data meets estimates or can show a slight decrease this could ease the fear of some financial institutions regarding what’s coming next from the Federal Reserve. If higher inflation numbers are displayed this would spark more volatility.

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WTI Crude Oil Six Month Chart on the 10th of October 2024

Certainly, USD selling got ahead of itself by the end of September. Day traders need to understand there are seldom one way avenues in Forex. Intraday reversals aside, when equilibrium and outlooks do not mesh via the insights of financial institutions, volatility occurs. The buying of the USD since September’s end has been noteworthy, but it was not entirely unexpected. The CPI and PPI reports from the U.S on the calendar will provide impetus. Let’s see if the markets remain calm as a swirl of other risk events linger in the air. Risk adverse tendencies have caused caution in the broad markets.

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USD Cash Index Six Month Chart on the 10th of October 2024

Traders need to know there will be one more jobs report from the U.S on the 1st of November. There are some people around us that no doubt believe the U.S government is showing better than expected jobs numbers to try and ramp up support for certain political candidates. However, if analysts do their jobs well enough and point to the revisions downwards that have been consistently seen, this could help alleviate fear of conspiracies.

The Fed is still in a position to cut the Federal Funds Rate by another 0.25 on the 7th of November. Yes, the FOMC Statement is coming only two days after the U.S election, so the Fed’s decision which will be garnered during meetings on the 6th and 7th will carry some significance depending on who has been elected U.S President. While U.S economic data has been mixed via a combination of jobs numbers which had been faltering until last week, and consumers suddenly showing greater confidence and manufacturing sentiment in important sectors with improved optimism, interest rates are still high. The Federal Reserve has a dilemma and likely will want to try continuing to incrementally cut borrowing costs when they have the opportunity.

Day traders should not be too concerned with what will happen a few weeks away, particularly when they are interested in the results of trades consisting of a few minutes, half hour, and other limited durations. But they should always understand their positions in Forex, equity indices, commodities, and elsewhere have little to no effect on the real marketplace. Day traders need to be able to catch onto the technical trends and behavioral sentiment being created by larger players and financial institutions.

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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.