Headlines:

• Dollar starts to push back after last week’s fall
• Japan finance minister reaffirms that rapid FX moves are undesirable
• BOJ governor Ueda says will not comment specifically on recent FX moves
• BOJ governor Ueda: Will guide policy appropriately to sustainably achieve price target
• Germany March industrial production -0.4% vs -0.6% m/m expected
• US MBA mortgage applications w.e. 3 May +2.6% vs -2.3% prior
• US reportedly looks to curb China’s access to AI software
• Morgan Stanley pushes back Fed rate cut forecast to September

Markets:

• USD leads, AUD and JPY lag on the day
• European equities mixed; S&P 500 futures down 0.2%
• US 10-year yields up 3.1 bps to 4.491%
• Gold up 0.1% to $2,316.08
• WTI crude down 1.2% to $77.43
• Bitcoin down 1.1% to $62,275

It was a relatively quiet session as there isn’t much on the agenda in trading today.

The dollar held steadier and is a touch higher on the day, helped out by a push above 155.00 in USD/JPY. The pair is slowly nudging higher as dip buyers keep up their conviction this week, with price up 0.5% to 155.45 currently. The 200-hour moving average at 155.50 is currently limiting gains ahead of US trading.

Besides that, the dollar is keeping a little firmer against the likes of the euro and pound. Meanwhile, AUD/USD is down 0.5% as well to 0.6563 as sellers contest a break below the 100-day moving average of 0.6577. The 200-hour moving average is also coming into play now at around 0.6560 on the day. Fall below that and the near-term bias switches to being more bearish instead.

In the equities space, US futures are taking a bit of a breather after the recent rebound. After the more tepid showing yesterday, S&P 500 futures are currently down 0.2%. In Europe though, stocks are still holding on to light gains with the UK FTSE keeping its push to fresh record highs today.

The greenback’s firmness today also owes to a slight bounce in bond yields as well on the session. 10-year Treasury yields are up roughly 3 bps as traders are still mulling over the recent economic developments since last week.

This article was written by Justin Low at www.forexlive.com.

• Prior -2.3%
• Market index 197.1 vs 192.1 prior
• Purchase index 144.2 vs 141.7 prior
• Refinance index 477.5 vs 456.9 prior
• 30-year mortgage rate 7.18% vs 7.29% prior

That’s a slight bounce back in US mortgage applications, with both purchases and refinancing activity picking up on the week. It comes as the average rate of the most popular US home loan eases off its highest levels since November in the week before.

This article was written by Justin Low at www.forexlive.com.

The biggest
mistake new traders make when trading the news is to look at only the so-called
“high impact” data on the economic calendar. What you see on the economic calendar
is generally the scheduled economic reports and events like inflation data,
central bank members’ speeches and so on.

There can
be also unscheduled news though that can catch you off-guard if you don’t have
a real-time news feed. Those could be leaks, breaking news reports and so on,
and they can have a strong impact on the markets.

CONTEXT IS KEY

Now,
looking at the economic calendar and thinking that only the data labelled as “high
impact” is important is wrong. There are times when the calendar will label
something as “low impact” when in reality it should be like very high. A recent
example that comes to my mind is the Japanese wage data before the BOJ meeting
in April when they raised rates.

That’s
because calendars consider only the historic volatility of the data and not the
context. The market focuses on different things based on the context. For
example, there are times when inflation reports have low impact on the market
even though they are always labelled as “high impact”.

This
generally happens when the economy is in recession or getting out of it and the
focus is mostly on growth indicators rather than inflation. On the other hand,
when we are well into the expansionary phase, the market places more emphasis
on inflation and the next central bank’s move. This is why trying to understand
where you are in the business cycle is key.

HOW TO TRADE THE NEWS

So, the way
you should look at the news is through a cause-effect point of view and mainly focusing
on growth, inflation and interest rates. Say you expect inflation to pick up forcing
the central bank to tighten monetary policy. You want the data to confirm
your views and act as a catalyst for the market to start pricing in that
change.

Generally,
you want to see the data beating or missing expectations because the bigger the
surprise, the bigger the market reaction will be. Data in line with consensus
shouldn’t trigger major market moves because it’s already expected and
basically priced in.

When you
build your idea, you need to visualise what is likely to happen in the next say
6-12 months and trade in that direction. You can time the market via technical
analysis or fundamental catalysts, but you shouldn’t focus on the present because
the present is already in the price.

CUTTING OUT THE NOISE

Every week
there are many economic indicators being released, but very few of them are
actually market moving. That’s because most of them do not change the future
expectations. You always need something that can change the future
expectations. A rule of thumb is knowing what the central bank is most focused
on and look at those indicators.

There’s also
kind of hierarchy for the country releasing the economic data. The US data is
by far the most influential one and can move all the asset classes across the
globe. As the dominant financial system in the global economy, the US business
cycle tends to be a major driver of the global business cycle as well. There’s
a reason why they say “if the US sneezes, the world catches a cold”.

In fact, if the US does well, it can create a positive risk sentiment (as long as the rest of the world is not doing too bad) and that’s when good US data may actually weaken the USD across the board.

IN SUMMARY

So, to sum up, here are some questions you should ask yourself when trading the news and fundamentals in general:

• Where are we in the business cycle?
• What is the central bank most focused on?
• What data can change the future expectations?

This article was written by Giuseppe Dellamotta at www.forexlive.com.

My bitcoin technical analysis video

Bitcoin technical analysis and BTCUSD price forecast: A bullish perspective for upcoming sessions

Welcome, crypto investors and traders. Today, I am delving into a detailed technical analysis of Bitcoin with the above video. With recent price movements and key technical levels, there’s an exciting opportunity for those looking to go long on Bitcoin. Let’s break down the analysis and discuss potential trading strategies.

📈 Key Resistance and Support Levels

• Critical Resistance:The pivotal level to watch is $62,195. Price reactions at this naked PoC key price level indicate significant market attention.

🟡 Trading Strategy: Going Long with Strategic Stops

• Immediate Strategy: After a slight decline over the past few days, Bitcoin presents a promising long entry point. A short stop-loss strategy is advisable to minimize risks.
• Stop-Loss Tip: Set your stop just above 1.5% of risk near the recent low at $61,356.

🔍 Technical Indicators and Patterns

• Yellow Channel: The mid-channel line serves as a minor resistance, which if broken, could signify a stronger bullish momentum.
• Purple Trendline: With three prior touch points, this trendline – see the purple line in the video above – is another importnat marker for potential price breakout to the higher side.

🚀 Potential Upside and Profit Targets

• Short-Term Target: Look to take initial profits around $63,000 and near the mid-channel line at approximately $64,660.
• Long-Term View: If the momentum continues, riding the wave up to $70,000 could yield a substantial reward, with a potential 9:1 reward-to-risk ratio.

🌟 Medium-Term Outlook

• Bullish Sentiment: The medium-term outlook remains bullish with expectations of breaking higher resistance levels in one to two consecutive attempts.
• Market Dynamics: Resistance levels often require several tests before a breakthrough; the upcoming attempt could be a decisive fourth or fifth try.

💡 Trading Tips

• Market Timing: If you’re catching this analysis a bit late, smaller timeframes may offer viable entry points. AGAIN – ENTRY AROUND The pivotal level is $62,195.
• Risk Management: Always trade within your risk tolerance and consider partial profits to secure gains.

🎯 Conclusion

While the bullish signals are not yet strong, this can be an early entry for the high risk vs reward trader. Remember that trading involves risk, and it’s crucial to approach each trade with careful consideration. Stay tuned to ForexLive.com for more updates, and as always, trade wisely and well.

Thank you for checking out ForexLive.com, and good luck in your trading endeavors!

This article was written by Itai Levitan at www.forexlive.com.