post278

Behavioral Sentiment: False Narratives and Noisy Realities

by with No Comment AMT MarketsAssetsFeatured Highlights

Behavioral Sentiment: False Narratives and Noisy Realities

The past handful of months in Forex have provided day traders problems if they have been trying to pursue steady trends. Constant flashes of rhetoric and news pervading tariff implications, U.S Federal Reserve interpretations from various media and analytical corners, and mixed economic data has caused a rather mired reality for speculators trying to operate.

post278
S&P 500 One Year Chart via Futures CFD Trading on the 9th of September 2025

However, if the noise is turned down by day traders and sometimes given less importance regarding potential influences, signals become visible and some perceptions can be looked upon as roadmaps. While many want to to throw their hands up and proclaim some sort of developing economic meltdown and a coming apocalypse, the major U.S indices are actually performing quite well as a barometer. The S&P 500 is continuing to challenge all-time values. Yes, the Nasdaq 100 and Dow Jones 30 are not marching in lockstep with the S&P 500 to new highs, but they are not far behind. The stock market has never guaranteed people an ability to constantly move upwards, but it does offer the potential to judge outlook and mid-term sentiment.

The USD has been extremely choppy since the start of this year, this as the Trump administration has taken over, but its trend towards weakness has been rather clear. The EUR/USD and GBP/USD have done reasonably well regarding mid-term strength. Yes, the USD/JPY has produced whipsaw movements and the Japanese Yen remains awkward, but this is a direct reflection of mitigating Japanese government policy (some may call it incompetence) regarding its ability to manage fiscal concerns, interest rates, and fight deflation and now inflation (which has been going on for a few decades).

Gold is traversing record heights and is showing signs of sustaining values above 3,600.00 as of yesterday. After languishing (albeit within elevated realms) near 3,350.00 the past handful of months with prevalent volatility, the precious metal has bolted out of its consolidation. And the likely reason for this is the anticipated Federal Reserve policy changes regarding interest rates. 10 Year U.S Treasury yields have also been pushed lower recently – this as financial institutions await a definite cut in interest rates by the Fed on the 17th of September. But folks who believe a 50 point basis reduction is coming late next week are likely wrong.

The Federal Reserve under Chairman Jerome Powell has been quite conservative, this will probably not change next Wednesday. It is more likely a cut of 25 basis points will take place on the 17th, and the FOMC Statement will offer the potential of another interest rate cut in October. Tomorrow’s PPI numbers and Thursday’s CPI results will influence the Fed’s coming meeting and mid-term outlook.

What we are left with is a broad market that is having a lot of noise applied to it by people with a variety of biases. Political bantering has reached a threshold in which it might be best to simply not pay attention to anything – but that is dangerous too. Yes, some people do talk sense, and some people do show signs of actually trying to engage in adult decision making regarding their insights, but it often feels like wanting to sound correct is more important than outcomes. Technical traders may be enjoying a quiet laugh at the expense of fundamental players right now.

However, economic data remains important. While rhetoric from the U.S White House and its opponents remains within a state of hyperbole, day traders should try to turn down the noise and pay attention to signals that long term investors continue to produce and take advantage of their sentiment. Stocks continue to be pursued and indices have done well, but volatility should be expected particularly into next week.
post271

Hard Truth: No Secret Sauce, A Possibly Unfriendly Reminder

by with No Comment AMT MarketsAssetsFeatured Highlights

Hard Truth: No Secret Sauce, A Possibly Unfriendly Reminder

Day traders face constant battles. Choppy conditions in markets lead many salespeople within brokerage firms to proclaim the ability to take advantage of technical shifts to their clients, but it is much easier to demonstrate what has taken place before compared to what is going to happen next. Technical trading via charts often looks good for those offering its charms until reality bites.

Day traders also have the disadvantage of fighting large market institutional forces that have completely different timeframes, deeper pockets, and perhaps even a fair amount of analyses they can use to validate their reasons for taking a position – not necessarily a correct position – but enough to provide insurance regarding their decision making.

post271
S&P 500 One Year Chart as of 22nd August 2025

Institutional traders can fall back on the analyses they have at their disposal and point to it as the reason why they made a trade. Literally giving them an excuse to explain why things went wrong, so they can tell inquiring management when needed, this in order to protect their miscues. Institutional players do not get fired easily from their positions, they usually just wait a few years and shift to another company when too many bad trades have been made – that is a dirty little secret in the trading world.

Comparatively, day traders simply blow out their own accounts while losing money. Yes, sometimes they have to explain to their romantic partner why they can’t go on the trip they had been planning because there is a sudden lack of funds. Hopefully they didn’t wipe out too much money that they may have borrowed from family or friends, this via ambitions and proclamations that a coming trade was a once in a lifetime opportunity.

But wait, yes, there are speculators and large traders who do make money. These are the folks many allude to who are – in many peoples’ minds – sitting on a yacht in a lovely ocean locale and enjoying the fruits of their labors. They do exists and we should acknowledge this, even if we sometimes think they are merely lucky and one day will face a losing streak.

However, many of these anointed winners do not exists either. Beware of experts ladies and gentlemen. Influencers are often selling a dream they know a day trader desires. Commissions drive the brokerage business. Unfortunately, it is seldom profits made by an emerging victorious crowd via newly minted speculators that make brokerages money.

I am frequently warned that this is not what day traders want to read. They do not want to be reminded that 90% of their group usually loses most of their money, or at a minimum walks away with less money than they started. The U.S Fed’s Jackson Hole Symposium is now underway in Wyoming. Yet, most day traders will only be able to take advantage of this event by trying to ride on the sentiment tides created by large institutional traders in Forex. The headline: Fed Rhetoric and Jackson Hole, will be the talking point of the media today.

However wait a moment please, the retail brokerage business in the States must be pointed out as a reason for some positive momentum in the major U.S indices the past handful of years and needs to be watched regarding its sentiment. Reddit, X, Instagram, Quora and other social media sites can be monitored to gather this info. Behavioral sentiment is becoming important in the markets. While some institutional investors are showing caution via inquiries (polling) and actual market positions, some public cash appears to be supporting the S&P 500, Nasdaq 100 and Dow Jones 30 via purchases through reputable brokers who do buy the actual asset.

That is a contradiction of sorts compared to what has been written in previous paragraphs, but then again this is trading (and investing) we are discussing, so there are no straight lines, and often complexity rules. Perhaps you noticed that I didn’t say, institutional players are smarter than day traders. In many cases institutions and their managers merely have more money to wager with, and can do this without too much leverage and over much longer timeframes – giving them the ability to ride out financial storms and survive.

Under the current market circumstances the Fed is expected to cut interest rates in September by 25 basis points. But the U.S central bank is going to face a possible battle via murky data that will have to be factored into October, November and decisions beyond, meaning caution prevails. Trading choppiness in Forex will continue in the near term. The possibility that financial institutions may believe current pricing represents fair value is legitimate.

Let’s remember that the movements in Forex, stocks and indices, commodities, bonds and other assets always appear more volatile for smaller traders, because intraday price action and the absurd amount of leverage being used by many folks often leads to dangerous speculative circumstances.

Traders need patience, shouldn’t use too much leverage and allow for the ability to walk away from a losing trade with limited losses. Leaving enough cash in your account to participate again later can lead to other opportunities. There are no guarantees in trading. Good trading discipline is essential.

post255

Quick Hits: Inflation, USD, China and U.S Trade and WTI

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Quick Hits: Inflation, USD, China and U.S Trade and WTI

Yesterday’s weaker than anticipated CPI data from the U.S cements the realization that inflation is eroding in the States statistically in a rather consistent fashion. Today’s PPI numbers will be watched, but yesterday’s results clearly show the Federal Reserve has been far too cautious.

Media reported yesterday’s inflation results differently showing bias as some pointed out that inflation rose, compared to some outlets that showed it came in less than expected. Bottom line – inflation has been below expectations consistently and tariff concerns as of yet have not killed the U.S economy with higher prices. The Fed’s insistence on being cautious are comparable to the instincts of an overly protective parent. Day traders need to understand their perceptions are in danger of being affected by folks with confirmation bias.

post255
EUR/USD Three Month Chart as of 12th June 2025

The EUR/USD climbed above the 1.15000 level again yesterday confirming mid-term outlook for a weaker USD based on the notion the Federal Reserve will have to lower the Federal Funds Rate exists. While perhaps kicking and screaming against their desires to remain hawkish, the Fed will start feeling the heat to act. Next week’s FOMC meeting is unlikely to be the actual date. However, financial institutions have certainly been leaning into a weaker USD since April, and the upwards trajectory in values by major currencies against the USD may prove to be a solid baseline via support prices moving forward.

Certainly, day traders should consider the notion that larger traders have bet against the USD already, thus leaving the door open to the potential of reversals. Yet, mid-term price levels are what financial institutions are gearing their outlooks towards via cash forward transactions for commercial companies. If financial institutions believe the Fed will have to indicate the potential of a rate cut not only in July, but another one in September this could spur on additional USD weakness. Folks should also consider the notion that the White House won’t be against a somewhat weaker USD in order to help U.S manufacturers and producers export.

post254
USD/CNY Six Month Chart as of 12th June 2025

U.S stock indices didn’t climb on the results of the China tariff news proclaiming a working agreement has been attained over the past two days. Perhaps markets are inclined to believe there will be more fireworks regarding rhetoric from the U.S and China over the coming months – which appears logical given the circumstances between the two nations.

While rare earth metals got the headlines, there appears to be plenty of line items in the tariff negotiations that still must be worked on. The announcement that the deadline has been pushed back again, this time until the 9th of August shows that talks are making progress – but slowly. Red lines keep getting erased.

Financial markets reacted rather passively to the U.S and China news, seemingly indicating larger players are now focused on other matters, and funds have played most of their cards regarding the China and U.S saga via their existing trading positions. Noteworthy, is the fact, the USD/CNY has reacted in a rather correlated fashion with the broad Forex market the past six months. For all the talk about a catastrophe for China and U.S trade, the USD/CYN has behaved quite well, showing the Chinese government is playing a long game against President Trump and doesn’t want to create a huge firefight via currency manipulation accusations.

post253
WTI Crude Oil Five Day Chart as of 12 June 2025

Middle East Escalation: WTI Crude Oil jumped late yesterday as news quickly filtered through social circles of embassy evacuations in various proximities within reach of Iran. The loud whispers certainly caused the price of the commodity to surge to almost $67.75 last night, but this morning’s values suggest some deep breaths have been taken as WTI trades near $66.45.

For options traders who want to buy cheap calls on WTI, they will likely have to look several months out and speculate on military escalation under rather speculative circumstances. If traders want an idea of what larger players are doing in options they can use CME (Chicago Mercantile Exchange) info to get some thoughts on positioning pattens in WTI Crude Oil calls and puts. The call options did get more expensive last night – meaning that some large traders are hedging against the threat of higher WTI Crude Oil prices because they are likely leaning into cheaper oil for the time being, or they are betting on the price of the commodity to rise if chaos breaks out in the Middle East.

post238

Trump: Will He or Won’t He Day and Uncertainty for Investors

by with No Comment AMT MarketsAssetsFeatured Highlights

Trump: Will He or Won't He Day and Uncertainty for Investors

post238
EURUSD One Month Chart as of 2nd April 2025

Liberation/Tariff Day will blow onto the global financial shores this morning. President Trump and his team are certain to take a victory lap as they announce their decisions regarding actions being imposed on commodities and products. Nations who are on the other end of the drama will be braced for the rhetoric and policies. Investors, trade ministers, financial institutions will have to sift through the pronouncements and consider their outlooks amidst uncertainty.

Trading today will be rough for smaller speculators. Choppy conditions should be expected as behavioral sentiment twists according to shifting winds and interpretations. President Trump is likely to announce aggressive penalties, but he may also try to soothe those who have worried about being punished. As an example, Trump has said recently that India has acted upon many of the White House’s wishes. Mexico, Canada, the European Union and China are likely to be mentioned as the U.S President speaks later today. Will a public scolding take place again?

Equities have faltered the past month, Forex has been volatile and commodity prices have also reflected fragile sentiment as outlooks became grey. The tariff policies announced today will affect all aspects of the financial world. Day traders thinking about wagering on the outcome should be patient and wait for the reactions which unfold from Asia, Europe, Africa, and the Americas. Wall Street will certainly be a barometer, along with the EUR/USD, USD/MXN, USD/JPY, GBP/USD, USD/SGD and gold.

While President Trump declares this is a great and magnificent day for the U.S, it will be of keen interest if an olive branch is offered to trading partners. After talking tough the past few months, financial institutions would like to hear words of optimism from the White House. If belligerence is heard and punitive actions are enacted, which are considered unproductive by investors and financial institutions the broad markets will show their disdain promptly.

President Trump’s skills as a negotiator will be judged today. The White House must play towards its constituency and show they are putting America First, but will the President also display he is cognizant that international trade provides benefits? Trump will point to his claim that he is merely putting tariffs on those who have treated the U.S unjustly and use levies against U.S goods.

It will be an important day for the Trump Presidency, because in many respects the global audience watching will decide whether or not the U.S sees itself as part of the global fabric or seeks a position which is isolationist. Brazil will look on the tariff theater intently, its position as a trading center may find increased demand from a host of nations.

Predicting the results: On the 3rd of February a fast and dangerous Forex market developed which witnessed USD centric strength exhibited with spikes in many currency pairs. In early March reactionary trading was displayed in equity indices, Forex and bonds too. Today will see wide spreads emerge in Forex with near-term resistance and support levels proving vulnerable.

Equities which sold off in March via the Nasdaq 100, S&P 500, Dow 30 and the Russell index are certainly hoping for a dose of cheer. The question is if Trump will deliver a positive message. The likelihood is that today’s events will not be the last of the tariff tirades and some proposed actions remain under deliberation. Today is unlikely to produce final results and the broad markets are probably going to be choppy as outlooks stay mitigated and absent of clear resolutions.

post237
Gold Three Month Chart as of 4th April 2025

Day traders should think safety first today. Gold remains within record territory. If unpredictability rules near-term and the reactions of investors and financial institutions create fast conditions, the precious metal and bonds will find takers. Uncertainty breeds cravings for risk adverse assets.

post230

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.

post230
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.

post229

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

post229
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.

post228

Market Volatility Concerns While Deflecting Noise From Afar

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Market Volatility Concerns While Deflecting Noise From Afar

post228
S&P 500 Six Month Chart as of 27th February 2025

The phrase if it bleed it leads is a fixture regarding the world of media. People and their companies want your attention. The addition of Donald Trump to the White House helps those that are content to see him in office, but it also helps those who oppose him because it gives his detractors a centerpiece to a lot of their ‘insights’. Perspectives abound and while watching the financial markets, we are bombarded with loud opinions formed by folks vying for our time. In many cases they are also trying to attract our money.

Wall Street has seen choppy results the past week, but speculators need to remain objective and not allow distractions to destroy their ability to gauge the marketplace. When looked upon with a mid-term reference it is rather easy to define the results upwards in the stock indices from the U.S have been rather good. There is no guarantee you are going to make money speculating. Losses occur and they do not only happen to speculators but they happen to investors too.

Timeframe speculative management and separating the noise from facts is difficult enough under normal circumstances. However, because of the notion if it ‘bleeds it leads’ which is dominating media for the moment, we are within a cycle when influencers can use headlines to catch our attention. Perhaps they believe what they say, perhaps they are trying to guide us towards a product, or perhaps they simply enjoy predicting misfortune.

post227
EUR/USD Six Month Chart as of 27th February 2025

Yesterday during President Trump’s cabinet meeting when asked about the E.U, Trump stated a proclamation of love for Europe, but then added that the E.U was a special economic case and has been getting away with a lot of things like expensive tariffs on the import of U.S cars. He also said the E.U was created to compete with the U.S – though this needs to be taken into context and that Trump meant this only as a trade competitor.

Nearly as quickly as Trump made his statement, some began to use this loose remark as a narrative that the EUR/USD was struggling because of these new worries. Fears about a massive trade war were sounded from some legitimate but overly contrived media sources. Yet, a trade war between the U.S and E.U isn’t going to happen ladies and gentlemen.

The fact is that the EUR/USD has been struggling for a handful of months and is starting to show signs that support levels are durable. The greater likelihood is that financial institutions believe the EUR/USD is oversold and have a bullish perspective for the currency pair over the mid-term. Yes, Europe continues to produce lackluster economic data, but a lot of the value in the EUR/USD has had risk adverse concerns priced in already. Looking for upside from the currency pair around its current levels is not farfetched. Downside risks look limited compared to upside potential.

Once again the financial media who want your attention were given click bait material to get you to react. Day traders need to understand they are constantly being sold not only false narratives but false opportunities too. Speculators looking for profits with quick hitting trades can make money, but many times they lose money because they are working in conditions in which they do not have enough control of their emotions. Day traders should clearly understand they are operating within a gambling universe when they attempt to trade Forex, equities, Indices, commodities and needless to say cryptocurrency.

Traders must work on improving their decision making process. They need to take into consideration their perceptions of the financial landscape, but also understand what their counterparts are thinking too. Financial institutions certainly trade for short-term results, but they are also operating with mid-term outlooks. The likelihood that they are worried about an onslaught of tariffs from the Trump administration is contained by the realization that the current President of the U.S negotiates using tough methods. The bombastic hyperbole of President Trump’s business techniques are not loved by everyone, but they often get the job done regarding his intended desires.

So what should you do? First of all relax with a deep breath. The world is not coming to an end. The financial landscape is not facing a cataclysmic scenario. Many volatile financial events have been seen throughout time. Traders need to understand that the market action on the SP500, Dow30, and Nasdaq are vulnerable to selloffs occasionally that can last for unknown durations which makes daily speculative wagering prone to significant cash losses. This is why investors who have different perspectives regarding timeframes and take a slow and steady approach often come out better than folks who are merely gambling.

Day traders need to eliminate as much noise as possible. This is done with solid risk taking tactics using methods which involve knowledge gained through experience, and knowing that not everything they are hearing is meant to help. Practice a trading mantra by having realistic price targets, chosen timeframes, conservative leverage; using entry orders helps, adding stop loss and take profit orders to get out of positions are vital too.

The mid-term outlook for the EUR/USD and the stock markets likely remains bullish in the eyes of financial institutions. There are many factors in trading, and the virtues of patience and knowledge help considerably. Again, remain calm because while the financial markets often react to shortcomings via human fallibility, they frequently become optimistic once again.

post226

EUR/USD and German Elections: Saying Quiet Thoughts Out Loud

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

EUR/USD and German Elections: Saying Quiet Thoughts Out Loud

post226
EUR/USD One Week Chart as of 23rd February 2025

The German Federal Election is taking place today and an expected shift to the right is being anticipated via the German voting public. The EUR/USD will react to the trading results tomorrow on Monday, and speculators who do not have deep pockets may want to remain on the side and simply watch the volatility as it develops.

After touching highs late last week which brought the 1.05000 vicinity into focus, also challenging the highs seen in the previous week, traders started to sell the EUR/USD going into this weekend. Financial institutions will react to the results from the German vote and if the Christian Democratic Union wins with strong results, and the AfD (Alternative for Deutschland) takes more seats than some anticipate this will cause an immediate reaction in the EUR/USD.

Voting publics in the U.S and elsewhere are showing signs of voting for more conservative leadership. Germany has seen lackluster economic results manifest for a long time and their public is certainly yearning for more GDP growth and less inflation. It is no secret that in nations such as Canada, Australia and countries in Europe that conservative voices are becoming louder when unbiased polling is conducted. Prime Minister Trudeau of Canada has already admitted his defeat via his decision to step aside.

The United States saw a very strong election result for Donald Trump and Republicans in November, and it would not be a surprise to see a similarly strong outcome for conservative candidates in Germany as results are announced late tonight and tomorrow. Voters seem to be expressing frustrations they feel they are not allowed to say out loud in polite circles. The results from Germany will likely mirror this consideration.

So what will the EUR/USD do if the voters in Germany elect a vastly more conservative government? Early results will be choppy, but a logical wager is to believe financial institutions will begin to look at the EUR/USD with a more bullish attitude, this if they believe a government is going to take power that is business friendly. Day traders should not bet blindly on EUR/USD upside. But looking for the 1.05000 level and higher to become a focal point for buyers is a legitimate outlook near-term.

The selloff in the EUR/USD this past Friday may have had a bit to do with financial institutions believing the upside had been overdone before the results of the German election were known. But that is likely a false narrative.

There is a better chance the sudden selloff in the EUR/USD on Friday which developed and saw fast velocity downwards, happened because Wall Street equities produced declines on its open and the selling continued going into the weekend. Forex is never easy, many complexities exists for speculators to consider.

The results from the German Federal Election today will influence major currency pairs this coming week and the EUR/USD will be centerstage. If Wall Street begins to show signs of stability this will also help the EUR/USD. Day traders should be extremely careful early tomorrow as financial institutions start participating and react to the results from Germany.

post225

Reserve Bank of New Zealand Expected to Cut 0.50 from Rate

by with No Comment AMT MarketsAssetsFeatured Highlights

Reserve Bank of New Zealand Expected to Cut 0.50 from Rate

post225
NZD/USD Six Month Chart as of 18th February 2025

NZD/USD Revival Mid-Term Coming? Reserve Bank of New Zealand is expected to cut its Official Cash Rate by 0.50 on Wednesday. N.Z govt is being proactive as they try to ignite the economy. The RBNZ also cut by 0.50 basis points in November. The central bank is expected to continue to remain aggressive tomorrow and suggest further cuts will be seen, perhaps via 0.25% afterwards.

The NZD/USD was trading around 0.63600 in late September of 2024 after gaining in correlation against the USD with the broad Forex market, via a bullish run which began in July. The NZD/USD is still traversing within its lower realms and it is logical to assume many financial institutions feel that support levels around the 0.56000 vicinity will prove rather durable going forward.

Day traders who believe the mid-term holds an optimistic bullish run for the NZD/USD may be correct, but speculators cannot be overly confident about a sustained surge higher quite yet. Conservative leverage is urged while looking for upside while betting. Speculators also need to remember tomorrow’s expected interest rate cut from the RBNZ has already been factored into the currency pair.

The rate cut is important for Wednesday, but it is the stance the Reserve Bank of New Zealand takes via its Monetary Policy Statement that affect behavioral sentiment among financial institutions. If the RBNZ sounds cautiously aggressive, meaning they suggest further cuts are being strongly considered this could help firm the NZD/USD and create more optimism regarding the potential for a move higher.

Yes, the shadow of the U.S White House administration looms over the Forex landscape. Decision making will remain tentative via financial institutions, but it is reasonable to suspect large players would treat clarity from the Reserve Bank of New Zealand with a positive Forex stance.

post223

USD/CAD Risk Premium Shifts from Ultra to Prudent Nervousness

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

USD/CAD Risk Premium Shifts from Ultra to Prudent Nervousness

post223
USD/CAD Six Month Chart as of 16th February 2025

The USD/CAD has experienced a bullish trend the past six months which has seen risk premium factor into the highs seen on the 3rd of February when the 1.48000 vicinity briefly witnessed a flirtation. The currency pair will enter this week near the 1.41800 area. It appears financial institutions are shifting from being ultra nervous about the rhetoric between the U.S and Canada to merely prudent.

On the 5th of November the USD/CAD was around 1.39000. The currency pair is now traversing values seen on the 10th of December. Economic data certainly factors into the USD/CAD value, but the move higher has definitely been a product of the rather raucous relationship between President Trump and Prime Minister Trudeau. The drama is not completely over and Forex traders who are looking for a sustained downturn in the USD/CAD should remain cautious regarding their wagers.

Consumer Price Index data will come from Canada this Tuesday. U.S inflation data released last week showed prices remain stubbornly above the target the Federal Reserve uses as a benchmark. Canadian inflation will likely demonstrate the same type of price pressures upward. However, these forecasted results from the Canadian CPI have likely been priced into the USD/CAD already by large players.

Which leaves us with the Trump/ Trudeau saga. And while Canada may feel like it is being unfairly pointed to as a villain by the White House, the problem for financial institutions is that Trump is firmly in power and Trudeau is about to vacate his office. The Canada Federal Election will be held on or before the 20th of October, and it is worthwhile to take into consideration the Liberal party is probably going to lose its leadership role to the Conservatives and Pierre Poilievre will be at the helm. Rest assured that financial institutions are taking this into consideration as they consider their mid-term outlooks.

The USD has shown some signs of less strength in recent trading across Forex. Financial institutions are perhaps factoring less risk premium into currencies as they anticipate tariff negotiations to provide answers and somewhat calmer conditions. Somewhat being the keyword. USD/CAD traders looking to target support levels in the near-term may try to anticipate the 1.41100 ratio as a goal. Looking for the USD/CAD to go below the 1.41000 level may be too much wishful thinking for the moment. Reversals higher in the currency pair will still be seen.

The USD/CAD will likely start to show a downturn, the question is when. Timing a sustained bearish trend in the USD/CAD for the moment remains gambling. The notion that the USD/CAD will see lower values in the mid-term however may be the right conviction, but deep pockets and patience will be needed.

post222

Apolitical Doesn’t Mean Blind to the Trump Forex Reality

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Apolitical Doesn’t Mean Blind to the Trump Forex Reality

Has everyone stopped panicking in global Forex? It appears financial institutions are showing signs of stability and perhaps even optimism, this as USD centric strength appears to actually have begun giving back the outlandish gains made on Monday when spikes higher were seen across Forex.

The nervous buying of the USD early on Monday morning erupted after President Trump’s ultimatums were not taken seriously by financial institutions late last week. Outwardly it appears that the targets consisting of Mexico and Canada going into the past weekend also wanted to make believe all would be fine. The only nation to say that it would negotiate with Trump prior to Friday was China. And now Mexico and Canada have largely fallen into line.

Speculators may want to be apolitical. They may want to believe Forex has nothing to do with politics. And some traders may not like President Trump and what he represents. However, Forex participants need to make sure they put their biases to the side and understand that economic rhetoric and actions from the U.S do effect the Forex reality.

post222
USD Cash Index Six Month Chart as of 5th February 2025

We have seen a vast example of this the past couple of weeks, in fact the past few months. Financial institutions have braced for and wagered on their outlooks since early November when the results of the U.S election became known. A strong USD centric element has been demonstrated as they prepared for President Trump to take executive power in the U.S again.

This past week has seen vivid Forex results and demonstrated why it is important to pay attention to international news flow, even when some may want to disregard what they are hearing. The price action in Forex particularly the USD/CAD and USD/MXN this week highlight the significance of not turning a blind eye. The highs seen on Monday followed by the reversals lower have brought support into view. Near-term and mid-term considerations will be fought over by financial institutions and retail traders may find technical opportunities to take advantage of nervous behavioral sentiment.

China which has dealt with President Trump before, appears to have handled the tariff bluster and negotiations better than Mexico and Canada. China has also been laying the groundwork to deal with the new White House administration based on having dealt with President Trump before. The USD/CNY has remained stable and China has set the table to deal with developing economic discussions in a calm manner.

It is not a question of liking or disliking Trump, it is a matter of understanding the reality and being ready to trade the circumstances that are seen across Forex. Bias when trading Forex can lead to bad decisions, it is not about betting on who you like, it is about wagering correctly on the results you believe will happen and managing your risks.

post221

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

post221
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.