• There isn’t a set path

That said, it is pretty clear that the ECB is angling for a move in June. And they will likely only be more explicit about that after the Q1 wages data in May.

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

The price action in gold lately has been one that has been hovering just under the $2,400 mark mostly. Buyers tried for a firm break of the key level but ultimately failed to hold a daily close above that. The mood music was also helped by recent geopolitical tensions between Israel and Iran. But as those fears ebb a little now, we’re seeing gold slip back. But has that changed the recent momentum?

Well, if you go by the hourly chart, it might be suggestive of a change in fortunes. That at least in the near-term for gold price action. During the run higher this month, price was largely defended by the key hourly moving averages. If not at the 100-hour moving average (red line), then at least at the 200-hour moving average (blue line).

That helped to keep buyers poised but now we’re seeing those key near-term levels falter in trading today.

Price is now down to $2,360 and trading below both key levels, suggesting that the near-term bias has shifted to being more bearish instead. I’d still put some emphasis on the minor support around $2,320-25 but if that gives way, we could be looking at a quick retracement to $2,200 for gold next.

The structural view still dictates that there is plenty of upside potential for gold though. I mean, this run higher comes despite markets having significantly pulled back on rate cut bets. So, if that starts to come back in again, there’s certainly fuel to add to the fire for gold in the big picture.

But just as how equities have retraced slightly after the bustling gains since last November, gold might be overdue that as well at some point.

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

I am eyeing Tesla stock before tommorow’s earnings report, and starting to buy now

As equity traders, we’re always on the lookout for opportunities that promise a good return against measured risk. Tesla Inc. (TSLA), the innovative electric vehicle and clean energy company, presents such an opportunity. Ahead of its earnings release tomorrow, post-market close, let’s delve into why Tesla stock might be gearing up for a favorable entry point.

Tesla’s stock performance has been a rollercoaster of highs and lows. Since its all-time peak — where the company’s value skyrocketed by over 100% — the price has corrected significantly, hovering around 52% below that zenith. This correction has captured the attention of traders looking for discounted entries into high-potential stocks.

The technical perspective at TSLA stock, see my video

From a technical analysis standpoint, there’s an interesting setup forming. Tesla’s price action is approaching the lower band of a Pitchfork pattern, coinciding with a gap formed post the earnings announcement on January 23. These technical indicators often attract traders who look for historical patterns to repeat themselves.

A net of buy orders predefined and ready, with the Levitan Method

Most traders do not know the Levitan method for dip buying so here goes… Although they might see this as an auspicious moment to consider entry as the downtrend is in play, that is clear. As the video shows a range where we target our buys, one might look to initiate a position at $142.61, closely aligned with the current premarket price. The plan involves scaling into the position — buying more shares at calculated lower points — and employing a disciplined stop-loss and take-profit strategy to manage risk.

A contrarian bet with calculated risk

One could argue that much of the negative news surrounding Tesla might already be priced in. If true, this contrarian approach might just pay off handsomely, especially for those willing to endure short-term volatility for long-term gains. With a stop loss set at 5% below the entry point and a take-profit target at a hefty 35% above, the risk-reward ratio stands at an attractive 7:1.

Long-term optimism but sharp risk management

While traders might decide to take partial profits along the way, holding a portion of Tesla stock for the long haul could be wise. If Tesla were to revisit its all-time high — a prospect that is not out of the question — the upside could be substantial.

You can enlarge the below image to see the details of the buying method and trade plan or TSLA stock.

Trade Plan for TSLA using the Levitan Method

1. Identify Potential Dip Points: Analyze the stock chart of TSLA to identify potential dip points below the current market price where demand may increase, using technical analysis indicators and historical price levels.

2. Determine Buy Levels and Shares: Plan to enter three separate buy orders at these dip points, with the number of shares based on a Fibonacci series. For instance:

   • First Buy Order: 33 shares (33 x 1)
   • Second Buy Order: 66 shares (33 x 2)
   • Third Buy Order: 99 shares (33 x 3)

3. Calculate Weighted Average Entry Price: If all three buy orders are filled, calculate the weighted average price of the shares purchased. This price will serve as the reference point for setting stop loss and take profit levels.

4. Set Stop Loss and Take Profit: Set a stop loss at 5% below the weighted average entry price to limit potential losses. Set a take profit level at 35% above the average entry price to lock in profits, aiming for a 7:1 reward-to-risk ratio.

5. Adjustments and Partial Profits: Traders may choose to take partial profits at a 2:1 reward-to-risk ratio if the price reaches a 20% gain. Additionally, consider leaving a portion of the position (e.g., 20%) to potentially benefit from long-term growth in TSLA stock.

6. Risk Management: Allocate a specific portion of the trading budget to this strategy, and do not exceed it to manage risk effectively.

7. Monitor the Trade: Keep a close eye on TSLA’s price action, news, and overall market sentiment, ready to adjust the trade plan as needed.

8. Document and Review: Record the details of all trades and review them regularly to refine the strategy over time.

Investing in Tesla right now is a classic contrarian bet, rooted in technical analysis and a belief in the company’s market position. As with all trading, there’s an inherent risk, and it’s crucial to trade based on one’s own research and risk tolerance. For those with an appetite for risk and an eye for potential, Tesla’s dip could be a launching pad for significant returns. Stay tuned to ForexLive.com for further analysis and updates on this developing story.

Remember, trade at your own risk. This article is not financial advice but rather a perspective on market opportunities based on current conditions. Always conduct thorough research or consult with a financial advisor before engaging in equity trading.

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

UPCOMING EVENTS:

• Monday: PBoC
  LPR, Canada PPI.
• Tuesday: Australia/Japan/Eurozone/UK/US
  Flash PMIs.
• Wednesday:
  Australia CPI, Canada Retail Sales, US Durable Goods Orders.
• Thursday: US Q1
  GDP Advance, US Jobless Claims.
• Friday: Tokyo
  CPI, Australia PPI, BoJ Policy Decision, US PCE.

Monday

The PBoC is expected to keep the LPR rates unchanged
at 3.45% for the 1-year and 3.95% for the 5-year. The recent data has been
weaker than expected with “activity”
data
disappointing and the latest CPI figures missing expectations by a big margin as the
deflationary threat remained present. The PBoC Governor Pan stated that they
still have sufficient room for monetary policy, so adjustments to the
policy rates cannot be ruled out.

Tuesday

Tuesday will
be the Flash PMIs day for many major economies, but the market will focus on
the US ones given the recent shift in the
Fed’s stance:

• Eurozone
  Manufacturing PMI 46.5 vs. 46.1 prior.
• Eurozone
  Services PMI 51.8 vs. 51.5 prior.
• UK
  Manufacturing PMI 50.2 vs. 50.3 prior.
• UK
  Services PMI 53.0 vs. 53.1 prior.

There is no
consensus for the US figures at the time of writing although the prior release
showed Manufacturing PMI ticking lower to 51.9 vs. 52.2 prior and Services PMI
falling to 51.7 vs. 52.3 prior.

• US
  Manufacturing PMI 50.2 vs. 50.7 prior.
• US
  Services PMI 52.0 vs. 52.5 prior.

Wednesday

The Australian Q1 CPI Y/Y is expected at
3.4% vs. 4.1% prior, while the Q/Q measure is seen at 0.8% vs. 0.6% prior. We
will also get the Monthly CPI data with the Y/Y figure seen at 3.4% vs. 3.4%
prior. As always, the market will focus mainly on the underlying inflation
readings (Trimmed-Mean and Weighted-Mean) as that’s what the RBA is more
concerned about. The market has priced
out all the rate cuts in 2024 and it’s now
looking at 2025 for the first one.

Thursday

The US Jobless Claims continue to be one
of the most important releases to follow every week as it’s a timelier
indicator on the state of the labour market. This is because disinflation to
the Fed’s target is more likely with a weakening labour market. A resilient
labour market though could make the achievement of the target more difficult.
Initial Claims keep on hovering around cycle lows, while Continuing Claims
remain firm around the 1800K level. This week Initial Claims are expected at
210K vs. 212K prior,
while there is no consensus at the time of writing for Continuing Claims
although the prior release showed a slight increase to 1812K vs. 1810K prior.

Friday

The BoJ is expected to keep interest rates
steady at 0.00-0.10% with absolutely no change to anything else except possibly
some minor tweak to their Real GDP and Core CPI projections. This meeting
follows the one where they finally exited
the negative interest rates policy
raising rates for the first time since 2007. Overall, it will likely be a
dull one, so the Tokyo CPI will carry more weight, although the
expectations aren’t great since inflation is seen falling further.

The Tokyo CPI Y/Y is expected at 2.6% vs.
2.6% prior, while the Core CPI Y/Y is seen at 2.2% vs. 2.4% prior and the
Core-Core CPI Y/Y at 2.7% vs. 2.9% prior. The Tokyo CPI is considered a leading
indicator of National CPI trends because Tokyo is the largest city in Japan and
is a major economic hub. The BoJ recently has been hinting
to a possibility of another rate hike regardless of its inflation forecasts. That
will need sustained wage growth and a rebound in consumption though.

The US PCE Y/Y is expected at 2.6% vs.
2.5% prior, while the M/M measure is seen at 0.3% vs. 0.3% prior. The Core PCE
Y/Y, which is the Fed’s preferred measure of inflation, is expected at 2.7% vs.
2.8% prior, while the M/M figure is seen at 0.27% vs. 0.26% prior. Forecasters
can reliably estimate the PCE once the CPI and PPI are out, so the market
already knows what to expect.

Moreover, Fed Chair Powell already hinted that
their estimates show the Core PCE to be little changed in March and despite
that, Fed’s Williams (neutral) brought rate hikes on the table if inflation
progress were to stall, and Fed’s Goolsbee (dove) shifted to a more neutral
stance.

The market will need a downside surprise
to increase the rate cuts pricing. Given the recent change in the Fed’s stance
though, the market’s reaction function should change from now on, and that is,
more hot data could start to see the market pricing in slight chances of a rate
hike.

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

Swiss National Bank Chair Jordan spoke with Switzerland’s national broadcaster, Schweizer Radio und Fernsehen (SRF, „Swiss Radio and Television“), saying that in many countries:

• economic growth is too low
• productivity is too low
• the level of debt is too high
• and deficits are too large

and that this is not sustainable. Jordan didn’t offer up specific solutions beyond saying that structural reforms to increase productivity and boost growth are needed. Meanwhile, central banks need a different focus:

• „It is very important that at the same time monetary policy remains geared towards price stability, rather than monetary policy being needed to finance debt, otherwise it will not end well“

This article was written by Eamonn Sheridan at www.forexlive.com.

In this vieeo, I take a look at all the major currencies vs the USD and outline the bias (bullish or bearish), risks and targets.

Be aware and prepared for the new trading week.

Below is the start and end times for each pair.

• Introduction 0:00 to 2:05
• EURUSD: 2:05 to 4:55
• USDJPY: 4:55 to 8:00
• GBPUSD: 8:00 to 11:55
• USDCHF: 11:55 to 15:50
• USDCAD: 15:50 to 19:00
• AUDUSD: 19:00 to 22:53
• NZDUSD: 22:52 to 25:30

This article was written by Greg Michalowski at www.forexlive.com.

• Nasdaq index gets creamed as high flyers take it on the chin
• Feds Financial Stability Report: Persistent inflation/tigher policy biggest risk
• Bank of Canada’s Macklem: Inflation is continuing to become less broad-based
• Crude oil futures settle at $82.22. What are the technicals telling traders.
• ECBs Muller: Sees a few more rate cuts by year end after June
• IMFs Japan Mission Chief: Weak yens impact on Japans economic growth is net positive
• BOEs Mann: Central banks will have to use autonomy effectively
• Baker Hughes oil rig count 511 vs 506 last week
• European indices close the week with mixed results
• IMF’s Georgieva: Need to finish the job on inflation
• ECB Wunsche: I dont have base case, but unlikely we cut only once in 2024
• More from BOE Ramsden: We will take into account Forex implications for inflation
• More Goolsbee:There are some measures in the economy, that historically don’t portend well
• More Goolsbee: We have done great on the employment mandate but not on inflation
• Chicago Fed Pres. Goolsbee: Progress on US inflation has installed
• BOE Ramsden: There are likely to be bumps in the disinflation process
• Chicago Fed Pres. Goolsbee expected to speak shortly
• Kickstart your FX trading for April 19 w/ a technical look at the EURUSD, USDJPY & GBPUSD
• ECB Pres. Lagarde: if inflation criteria is met it will be appropriate cut rates
• The CHF is the strongest and the NZD is the weakest as the NA session begins
• ForexLive European FX news wrap: A round trip for markets as the jitters fade

The focus today was on the big-cap tech stocks today. The Nasdaq index got creamed with a decline of -2.05%. That was the largest decline since January 31 when the index fell -2.23% The move lower was initially off of disappointing forward guidance from Netflix after its earning announcement after the close on Thursdays. Its shares tumbled -9.09%.

The kick to the downside got another shove, just before the open Super Micro Computers announced its earnings date, but did not to pre-announce its earnings for the fiscal third quarter. SMCI has been one of the darlings of the 1Q as it tagged along with Nvidia. According to sources, in seven of the past eight quarters, the company issued a press release announcing preliminary results ahead of its routine earnings release, generally raising financial guidance. That was not to be today, and the stock fell sharply in reaction. That momentum continued in the US session with the stock plunging 23.16% to $713.65. The high price in the 1Q reached $1229.00. The decline. Nvidia as well. It shares fell $84.31 or -10.0% to $762.

BTW Super Micro Computers will announce their earnings on April 30. Nvidia doesn’t announce until May 22

Other big movers today included a number of different chip stocks:

• AMD, – 5.44%.
• Micro -4.61%
• Broadcom -4.31%
• Meta Platforms -4.13%
• CrowdStrike holdings -3.99%
• Taiwan semiconductor -3.46%
• Amazon -2.56%
• Intel -2.40%
• Qualcomm -2.36%
• Tesla, -1.92%.

Next week, the earnings calendar kicks into full gear Below is a sampling of some of the major earnings releases. :

• Monday: Verizon,SAP
• Tuesday: GM, Tesla,Visa, Texas Instruments
• Wednesday: Boeing, AT&T, General Dynamics, Meta Platforms, IBM, Ford, Chipotle, ServiceNow
• Thursday: American Airlines, Caterpillar,Southwest Airlines, Bristol-Myers Squibb,Microsoft, Alphabet,Intel
• Friday: Exxon Mobil, Chevron

In the US debt market today, yields move modestly lower.

• 2-year yield, 4.99%, unchanged
• 5-year yield 4.671%, -1.6 basis points
• 10-year yield 4.622%, -2.4 basis points
• 30-year yield 4.715% -2.9 basis points

For the trading week yields moved higher as markets reacted to the Fed’s shift toward rates steady for longer:

• 2-year yield +8.7 basis points
• 5-year yield +11.4 basis points
• 10-year yield +9.7 basis points
• 30-year yield +8.3 basis points

A snapshot of the forex market at the week’s end has the CHF as the strongest of the major currencies on the back of a safety bid.

The GBP was the weakest. BOEs Ramsden commented that:

• Over the last few months, I have become more confident in the evidence that risks to persistence and domestic inflation pressures are receding.
• Balance of domestic risks to the outlook for UK inflation is now tilted to the downside.

That helped to push the GBPUSD to the downside and the pair moved to the lowest level for the year and going back to November 14. The price is also testing the 61.8% of the move higher from the October 2023 low at 1.23635, and the high of a swing area going back to first quarter of 2023 at 1.2368. The low price today in the GBPUSD reached 1.2366.

Fed’s Goolsbee closed up the Fedspeak ahead of the quiet period (the Fed is to next announce on May 1). Goolsbee discussed the current state of the U.S. economy, highlighting a stall in progress on inflation and advocating for a cautious approach to interest rates until more clarity is achieved. He affirmed that the Federal Reserve’s current restrictive monetary policy remains appropriate but emphasized that future policy adjustments will be data-driven. Goolsbee pointed out the persistent challenge posed by high housing inflation and noted that there is room for improvement in services inflation through increases in labor supply. He questioned whether strong GDP and job numbers might indicate an overheating economy contributing to inflationary pressures, though he also acknowledged that not all data suggest labor market overheating. While the Fed has successfully maintained low unemployment, it has struggled to meet its inflation mandate. Goolsbee warned against maintaining a high level of restrictiveness for too long due to potential negative impacts on employment. He described the policy trade-offs as increasingly complex and noted that the real Federal Funds rate is historically high. Optimistically, he projected that inflation would return to the 2% target over a reasonable period, and he did not dismiss any policy options, including rate hikes if necessary, to manage economic conditions.

Meanwhile, ECB officials today including Lagarge. Muller and Wunsch advocating for multiple rate cuts starting in June.

The US core PCE data will be released on Friday and will be key for the Fed outlook going forward.

This article was written by Greg Michalowski at www.forexlive.com.

The US major indices closed mixed as investors flowed out of of large-cap technology stocks and into the relative safety of the industrials. The Dow industrial average rose, while the NASDAQ index got creamed with its largest decline since January 23 when the index fell -2.23%. Today the index fell -2.05%.

A look at the final number shows:

• Dow Industrial Average average rose 211.02 points or 0.56% at 37986.41
• S&P index fell -43.87 points or -0.88% at 4967.24. The decline was the 6th consecutive down day for the index.
• NASDAQ index tumbled -319.49 points or -2.05% at 15282.01.The decline was the 6th consecutive down day for the index.

The small-cap Russell 2000 rose 4.69 points or 0.24% at 1947.65

For the trading week, the Dow Industrial Average closed near unchanged, but the NASDAQ at its worst trading week since October 2022.

• Dow Industrial Average rose 0.01% which was good enough to snap a two-week decline
• S&P index fell -3.05% and closed lower for the third consecutive week.
• NASDAQ index-5.52%, and has now fallen for four consecutive weeks.

Shares of Nvidia had their worst day since March 2020. Tesla had closed at its lowest level since January 2023.

This article was written by Greg Michalowski at www.forexlive.com.

The Fed is out with the details of semiannual Financial Stability Report. In it they say:

• Persistent inflation, tighter monetary policy remain most cited potential risk to the financial system
• ‚Policy uncertainty,’ including escalating geopolitical tensions and upcoming US elections, cited by 60% of respondents as potential financial stability risk
• Commercial real estate and banking sector stress less frequently cited as stability risk than in Fed’s fall 2023 survey
• Nearly two-thirds of respondents mentioned policy uncertainty as a risk, significantly higher than in the October report
• Cyberattacks, US-China tensions, Middle East conflicts also listed as risks, while nonbanks and Ukraine-Russia war have dropped off risk list
• Leverage at hedge funds reached highest level since data collection began
• Concerns over uninsured deposits and other factors continued to generate funding pressures for a subset of banks
• 1,804 of more than 9,000 eligible institutions tapped the Bank Term Funding Program; 95% of those had assets of less than $10 bln

The Federal Reserve’s Financial Stability Report is a semi-annual publication that assesses and details the stability of the financial system in the United States. The key elements of this report include:

1. Risk Analysis: It identifies and analyzes potential risks to financial stability, which could include issues like asset price volatility, borrowing by businesses and households, leverage within the financial sector, and funding risks.

2. Current Assessment: The report provides an assessment of the current financial system conditions, noting any vulnerabilities that might pose risks to stability.

3. Potential Shocks: It evaluates the system’s susceptibility to shocks from domestic and international sources, such as economic downturns, geopolitical tensions, and major policy changes.

4. Regulatory and Policy Developments: The report also discusses the impact of regulatory and legislative changes on financial stability, including new rules or modifications to existing regulations.

5. Economic Outlook: Although primarily focused on stability, the report often includes insights into the broader economic environment, including aspects like inflation rates, employment, and economic growth, which all influence financial stability.

6. Stress Testing and Scenarios: The report might include results from stress tests conducted on banks to assess their resilience in adverse economic scenarios.

The goal of the Federal Reserve’s Financial Stability Report is to promote market transparency by providing a thorough analysis of the financial system’s robustness, and to signal to lawmakers, regulators, and the public about potential risks that could undermine financial stability. This helps in forming policies and taking measures to mitigate identified risks.

CLICK HERE for the full report.

This article was written by Greg Michalowski at www.forexlive.com.

The Bank of Canada’s Macklem is on the wires saying:

• At first glance, federal budget does not really change fiscal track since the Nov 2023 fall economic statement
• Budget contains spending measures and new taxes; federal government’s commitment to stick to fiscal guard rails is helpful
• Reiterates bank will be looking for evidence that the recent downward momentum in inflation is sustained
• Canadian inflation is continuing to become less broad-based; things are moving in the right direction
• Overall we see downside risks to the inflation outlook are lower than they were
• There are some signs of stress in household finance, mostly in non-mortgage holders; delinquencies have moved up but they are not at alarming levels
• Geopolitical tensions are a source of deep concern in the international community
• If there is a spike in oil prices that is something we’ll have to take into account

This article was written by Greg Michalowski at www.forexlive.com.