ETHUSD, H4 I Potential Bounce

Type: Bullish BounceKey Levels:Resistance: 3252Pivot: 3034Support: 2811Preferred Case:With price moving above the Ichimoku cloud, signifying an overall bullish momentum. We can expect price to rise to our 1st resistance at 3252 in line horizontal graphical swing high resistance and 100% Fibonacci projection from our pivot in line with horizontal overlap support and 38.2% Fibonacci retracement at 3034.Alternative Scenario:Alternatively, price may break pivot structure and head for 1st support at 2811, which coincides with horizontal overlap support and 61.8% Fibonacci retracement.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/ethusd-h4-i-potential-bounce"
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USDJPY, H4 | Short-term Bearish Drop

Type: Bearish ReversalKey Levels:Resistance: 116.998Pivot: 116.351Support: 114.95Preferred Case:Price is abiding to the ascending channel, signifying an overall bearish momentum. However, price is approaching a horizontal resistance, we can expect a short-term bearish drop from the pivot level in line with 100% Fibonacci projection. Price could drop down to 1st Support in line with 78.6% Fibonacci projection and 61.8% Fibonacci retracement. Our short-term bearish momentum is further supported by stochastic indicator where the %K line is at the resistance level.Alternative Scenario:Alternatively, price could push higher up to 1st Resistance in line with 127.2% Fibonacci projection.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/usdjpy-h4-or-short-term-bearish-drop"
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Dollar Up Over Higher-Than-Expected U.S. Inflation and Bets on Fed Rate Hike

from Forex News https://www.investing.com/news/forex-news/dollar-up-over-higherthanexpected-us-inflation-and-bets-on-fed-rate-hike-2761935
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Rate hike bets keep U.S. dollar bid

from Forex News https://www.investing.com/news/economy/rate-hike-bets-keep-us-dollar-bid-2761902
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How will the cost of living squeeze affect house prices in the UK?

2021 was a staggeringly strong year for the UK housing market: property sales were at their highest levels since 2007, and prices rose at double-digit rates (it varies depending on which survey you use, but 10% is a good rough estimate).

And all the latest surveys suggest that 2022 has started off strong too.

But with consumers facing painful cost increases and interest rates rising at the same time, is that really likely to continue this year?

Why rising living costs might not hit the housing market quite yet

According to the latest survey from the Royal Institution of Chartered Surveyors, the UK housing market started 2022 in fine fettle.

New buyer enquiries shot up, well beyond expectations, to their highest level since May last year. More people put their homes on the market, but demand is still outstripping supply. And agreed sales rose too. In all, it was a much stronger survey than expected.

But how long can this continue? For one thing, as if you hadn’t noticed, we have a burgeoning cost of living crisis. For another, central banks around the world are starting to put up interest rates, so the cost of mortgages is going to go up too. It’s also worth remembering that this is all happening at a time when house prices – even by recent standards – are very, very expensive.

Well, let’s think about this. The rising cost of living is an issue. That eats into disposable income. This makes it harder to save for a deposit. It also makes it harder to meet monthly mortgage payments.

However, I’m not sure that the rising cost of living by itself would be enough to dent the housing market for now. Home owners and would-be home owners tend to be drawn from the ranks of the better off. The rising cost of living hits the poorest hardest.

(You can argue about relative rates of inflation, but I don’t think there’s any argument that those on the lowest incomes spend a much bigger proportion of their income on necessities, which therefore means rising energy and food costs are going to batter their household balance sheets hardest.)

Certainly, rising living costs cut into everyone’s disposable income. But if they’re regarded as a temporary hurdle (either costs go back down or wages rise to match) then households with savings will be willing to use some of those savings with the expectation of replenishing them further down the line.

So while inflation matters, at current levels, I don’t think that alone is enough to stifle activity in the housing market.

The most important variable is the cost of borrowing

So what might do it? On this front, it can be very valuable to look at what’s going on in other countries. In the US, sentiment in the housing market has taken a sudden tumble. A record low number of US consumers think that it’s now a good time to buy a house, whereas the number who thinks it’s a good time to sell has shot up.

Why? US houses are expensive too (I mean, by American standards – I think most British people would look at what you can get in most parts of the US with gawping envy), having seen prices rocket during the pandemic. And Americans are seeing their living costs rise too.

But what I suspect is most important is that, as Gary Shilling points out on Bloomberg, the interest rate on a 30-year mortgage has risen from 2.82% in February last year to 3.84% more recently. Most Americans use 30-year loans to buy their homes, so that means that the cost of borrowing has gone up sharply.

In the UK, our mortgage market is very different, so mortgage costs haven’t gone up by anywhere near as much. But to my mind, it’s an excellent illustration of how important credit availability and cost is to the housing market, and thus to house prices.

The one thing I’m virtually certain of (as sure as you can be of anything in markets) is that by far the biggest driver of house prices is the cost of credit. So there’s no doubt at all in my mind that if mortgage rates rise significantly, house price growth will stall, and prices might even fall. No question about that.

So the question is: how high will mortgage rates actually rise, and how quickly? That’s a much tougher one. How high will the Bank of England really raise rates before markets get vertigo and it has to stop? And how much of this is ultimately dependent on the Federal Reserve, America’s central bank?

And if banks are seeing healthier margins, and lenders are willing to lend over ever-greater periods of time, will borrowing conditions really deteriorate that significantly? I suspect that it’s the flexibility of our mortgage market that makes the UK housing market so much more volatile than the US one, for example.

For now, Andrew Wishart at Capital Economics argues that “house price growth will remain high until the summer, by which time rising mortgage rates will start to weigh on demand”. That sounds as good a guess to me as any. We’ll keep an eye on the direction of mortgage costs and see what happens.

As for what this means for you: as we’ve said countless times before, there is no sense in trying to time the housing market. The decision to buy a home to live in is driven by many more things than money alone, so rather than second-guess the market, all you can really do is try to make sure that you can afford it under reasonable assumptions.

There will be plenty of booms and busts during your lifetime in the housing market, after all, so to an extent, it’s swings and roundabouts. That said, now is probably the time to favour longer-term fixes where you can get them.

from Moneyweek RSS Feed https://moneyweek.com/investments/property/house-prices/604437/cost-of-living-house-prices-in-uk
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Investment Bank Outlook 10-02-2022

CitiEuropean OpenMarkets were calm ahead of a well-watched US CPI print later today. DXY grinded slightly higher while UST were slightly higher across the curve. JGB futures slid after enhanced liquidity auctions saw very weak demand metrics, pushing 10y yields to 0.22%, close again to BoJ’s 0.25% threshold. Meanwhile the RBI pulled a dovish surprise, maintaining its key rate, the reverse repo rate and giving little guidance on OMO. The markets’ expectations were for a 20bps increase in the reverse repo rate and for guidance in OMO. As a result, INR dipped slightly while IGB yields fell.Looking ahead, although we see several rate decisions and key data, eyes will all be on the US CPI at 13:30 GMT. USD also sees Initial Jobless Claims & Continuing Claims at the same time. NOK sees a CPI at 07:00 GMT, while SEK sees a rate decision at 08:30 GMT where we eye the level of dovishness in the central bank’s messaging. EUR sees economic forecasts at 10:00 GMT, followed by Banking Supervision press conference at 10:00 GMT and ECB speak throughout the day. BoE Governor Bailey will speak at 20:15 GMT. In the EM space, we see a slew of rate decisions starting with IDR at 07:20 GMT and HUF at 08:30 GMT where no change is expected. MXN sees a rate decision at 19:00 GMT where we expect +50bps to 6.0%. PEN similarly expects 50bps hike to 3.5 in its rate decision at 23:00 GMT. PLN and CLP sees central bank minutes.EUR: Eurozone European Commission publishes Economic Forecasts at 10:00 GMT, followed by Banking Supervision press conference at 10:00 GMT and speak throughout the day. Citi Economics will focus on whether there is any dovish pushback in Thursday’s speak following last week’s hawkish ECB and likely inflation revisions in the economic forecasts. Philip Lane’s panel participation Thursday will be important, given he voted for a 25bp hike and leans dovish-neutral.GBP: Bank of England Governor Andrew Bailey speaks at 20:15 GMT. Citi Economics expects Bailey to focus on the outlook for monetary policy – just like Pill is expected to do earlier in the week. Further push back against the hawkish re-pricing since February’s MPC meeting seems likely, including emphasis on the medium-term headwinds to demand.Credit AgricoleAsia overnightInvestors’ nerves were soothed a little by the rhetoric from FOMC officials suggesting an overly aggressive rate hiking cycle was not on its way. Key hawk and voter in 2022, Loretta Mester, said that while all options were on the table for the March meeting, the was not a “compelling case” for a 50bp hike in March. Raphael Bostic, a non-voter in 2022, also said he saw three maybe four rate hikes this year. So despite a strong rally in equities, UST 10Y yields took a break from rallying and remained below the key 2% level. Strong results from Disney and Uber also helped equities. While most Asian bourses were higher, S&P500 futures were trading lower at the time of writing. G10 FX was trading in tight ranges in the Asian session and trading in line with S&P500 futures and in a risk-off fashion. The AUD and NOK were the underperformers during the session and the EUR and CHF the outperformers.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-10-02-2022"
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Daily Market Outlook, February 10, 2022

Daily Market Outlook, February 10, 2022 Overnight Headlines US Consumer Inflation Expected To Hit The Highest Since 1982 Fed's Mester Not Keen On Half-Point Hike; Bostic's Options Open New China Tariff Probe Among The Options Considered By Biden US Lawmakers Are Pessimistic About The New Iran Nuclear Deal More ECB Officials Distrust Inflation Forecast Amid Hawkish Turn Inflation Seen Below ECB's Goal In 2023 In Draft EU Forecasts Brussels Launches First Post-Brexit Court Case Against The UK Tokyo To Remain Under Covid Quasi-Emergency Until March 6 Oil Steady As Investors Eye Nuclear Talks; Gold Range Bound Asian Equity Markets Are Mixed While US Futures Edge Lower Disney And Uber Both Rally In After Hours Trade Post Earnings The Day Ahead Asian stock markets are mostly up this morning ahead of today’s important US inflation release. Market risk sentiment may have been helped by US Federal Reserve policymaker Mester’s claim that they did not want to disrupt markets. She did warn that interest rates were likely to rise but said there was no compelling case for an immediate 50 basis point hike. Meanwhile, UK PM Johnson said yesterday that all Covid restrictions will end in England in two weeks’ time. The UK RICS housing index rose to 74 in January from 69. Given ongoing concerns about inflationary pressures, today’s January US CPI report is probably the key release of the week for markets. Annual inflation seems certain to move up again and markets expect a new 40-year high of 7.6% (from 7.0% in December). Look for above consensus with some economists seemingly expecting much of the recent rise in energy prices to show up in the February numbers. However, there is agreement that inflation is set to rise further with a risk that it could hit 8% in February. Core inflation (excluding food and energy) is also expected to have increased to 6% from 5.5%, which would be a near 40-year high. US inflation seems likely to peak in Q1 and should fall sharply in the second half of the year as last year’s big increases in oil and gas prices fall out of annual comparisons. However, the extent to which ‘core’ inflation will ease is more uncertain given ongoing concerns about wage pressures from a tight labour market. That is likely to be the key focus for the US Federal Reserve this year and the number one determinant of the extent to which US interest rates will rise. Tonight’s speech by BoE Governor Bailey will be watched closely for further clues on the outlook for UK monetary policy. Most of last week’s policy update was broadly as expected but the hawkish surprise was that 4 of the 9 Monetary Policy Committee members voted to hike interest rates by 50 basis points rather than just 25. The BoE did partially offset this with relatively dovish forward guidance which suggested that market interest rate expectations are too high, but the overall result was to further raise those expectations. Markets will be looking for further clues tonight on whether Bank Rate will again be raised in March but it will also be interesting to watch the extent to which Bailey pushes back against market expectations. The UK GDP update for December, to be released early tomorrow is forecast to show a fall in activity primarily due to the impact of Omicron. Look for a monthly decline of 0.7% led by consumer-facing services but other parts of the economy are likely to have been less affected.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby (P) Puts (C) Calls ) EUR/USD: 1.1250 (470M), 1.1290-00 (698M) 1.1315 (414M), 1.1330-40 (1.85BLN), 1.1375-80 (455M) 1.1410-15 (450M), 1.1420-30 (670M), 1.1440-50 (615M) 1.1460-65 (420M), 1.1490-00 (1.6BLN), 1.1520-25 (637M) 1.1540 (289M), 1.1580-90 (605M), 1.1595-00 (1.6BLN) 1.1620 (500M), 1.1720 (415M) USD/JPY: 114.50-55 (500M), 116.25 (300M) GBP/USD: 1.3300 (342M), 1.3400 (300M), 1.3415 (513M) 1.3500-05 (920M), 1.3520 (811M). EUR/GBP 0.8405 (700M) USD/CHF: 0.9170-75 (490M). USD/CAD: 1.2670-80 (960M) 1.2810 (1.2BLN), 1.3000 (400M) AUD/USD: 0.7150-60 (1.48BLN), 0.7170-80 (847M) 0.7190-00 (610M). USD/ZAR: 14.90 (310M), 15.65-85 (640M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.15 Bullish above EUR sees little action in Asia ahead of US CPI release EUR complex in relatively tight ranges ahead of key US CPI data tonight EUR/USD 1.1414-29 EBS, option expiries today help contain action 1.1410-20 E797 mln, 1.1430-40 E750 mln, more above, some below On hold for now around 1.1417 100-DMA, below 1.1439 Ichi cloud top Also in 1.1419-28 hourly Ichi cloud, below 100-HMA at 1.1434 EUR/JPY sideways just below 132.14-15 highs Fri/yesterday, 131.87-132.04 EUR/GBP 0.8437-0.8440, quiet, above E702 mln 0.8405 option expiriesGBPUSD Bias: Bearish below 1.36 Bullish above. Soft at familiar levels ahead of U.S. inflation -0.05% in a tight 1.3526-1.3535 range after a flurry at the open UK's hot labour market cools, but wages remain buoyant BoE & government call for wage restraint faces challenges Charts; momentum studies 5, 10 & 21 day moving averages conflict 21 day Bollinger bands edge lower - neutral setup favours range trading 1.3462 61.8% Jan-Feb bounce and 1.3657, 76.4% 2022 fall pivotal levels Consolidates just below 1.3554 mid point of 2022 range looking for a trigger Yield differentials, EU-UK N.Ireland talks and the USD key factorsUSDJPY Bias: Bullish above 114.50 Bearish below USD/JPY bid into London, through lighter offers to 115.71 Japanese offers being off-ed into long weekend, easier for USD/JPY to rise Fresh trend highs being etched as Tokyo trade winds down, shorts cover USD/JPY from post-Tokyo fix low of 115.48 to 115.71 EBS today Move up premature pre-US CPI tonight? +0.5% m/m, +7.3% y/y eyed US yields range between 1.923%-1.944% in Asia, currently @1.929% Nikkei closed session +0.4% at 27,696.08, E-Minis -0.1% @4573AUDUSD Bias: Bearish below 0.7250 Bullish above AUD/USD loses a foothold ahead of pivotal moment for USTs AUD/USD slips to 0.7172 from opening 0.7183; ASX +0.3% Loses foothold if it ends below Ichimoku Cloud 0.7174 That would pressure it back under 21 DMA 0.7148; bearish Pivotal moment arrives for USTs as US CPI data looms Strong inflation reading could push 10y above 2.00% barrier But a weak number might send AUD/USD to 100 DMA 0.7250

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-february-10-2022"
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AUDUSD,H4 | Potential Bullish Momentum

Type: Bullish BounceKey Levels:Resistance: 0.72596Pivot: 0.71617Support: 0.71129Preferred Case:Price broke out of the descending channel, signifying an overall bullish momentum. We can expect price to bounce from pivot level in line with 23.6% Fibonacci retracement and graphical overlap support towards 1st Resistance in line with previous swing high and 100% Fibonacci projection. Our bullish bias is further supported by the Ichimoku indicator where the prices are holding above the cloud.Alternative Scenario:Alternatively, price can drop down to 1st Support in line with 61.8% Fibonacci projection and 61.8% Fibonacci retracement.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/audusd-h4-or-potential-bullish-momentum"
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USD/RUB Is on The Rise, Gold Likely to Drop

Good day,The Russian ruble broke the uptrend. Currently, it is targeting the supporting level of 73.35. USD/RUB might potentially pull from this level and jump.Gold is on the rise. The asset has approached the weekly downtrend denoted by the blue line on the chart as well as the resistance at the level of 1845.00. Gold might potentially pull from this resistance and drop.The price of the EUR/USD pair broke the downtrend and pulled back, testing the broken trendline and trying to close the trading day with engulfing. Euro might eventually jump and enter the range between the levels 1.1525 and 1.1615.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/usdrub-is-on-the-rise-gold-likely-to-drop"
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DXY, H4 | Potential For Bullish Bounce!

Type: Bullish BounceKey Levels:Resistance: 95.824Pivot: 95.369Support: 95.254Preferred Case:Prices are on bullish momentum and abiding to our ascending trendline. We see the potential for a bounce from our Pivot at 95.369 in line with 61.8% Fibonacci retracement towards our 1st resistance at 95.824 in line with 78.6% Fibonacci extension. Our bullish bias is further supported by RSI portraying bullish momentum.Alternative Scenario:Alternatively, prices may retest our 1st support at 95.254 in line with 78.6% Fibonacci retracement and 78.6% Fibonacci extension.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/dxy-h4-or-potential-for-bullish-bounce"
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EURAUD, H4 | Potential For Bullish Bounce!

Type: Bullish BounceKey Levels:Resistance: 1.59861Pivot: 1.59036Support: 1.58751Preferred Case:Prices are on bullish momentum and abiding to our ascending trendline support. We see the potential for prices to bounce from our Pivot at 1.59036 in line with 50% Fibonacci retracement towards our 1st resistance at 1.59861 in line with 38.2% Fibonacci retracement. Our bullish bias is further supported by prices trading above our Ichimoku cloud resistance.Alternative Scenario:Alternatively, prices may dip towards our 1st support at 1.58751 in line with 78.6% Fibonacci retracement.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/euraud-h4-or-potential-for-bullish-bounce"
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Antipodeans hold onto recent gains as global markets await U.S. inflation data

from Forex News https://www.investing.com/news/economy/better-risk-sentiment-help-antipodeans-but-traders-wait-for-us-inflation-data-2760885
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Dollar Up, Increased Risk Sentiment Boost Riskier Currencies Ahead of U.S. Data

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Midweek Podcast – February 9

All eyes are now on Thursday’s US CPI reading which is expected to top 7.3%.
Central banks are clearly getting nervous about the risk of second round effects. The RBA, BoE and ECB all turned up the heat, lifting the EUR and European peripheral yields, while Governor Bailey talked of Inflation at 7%+ by April.

HotForex · Midweek Market Podcast – February 9 2022

The Market Week – February Week 2   

The financial markets remain nervous and volatile against the background of geopolitical risk, with stocks still pressured and the Dollar and Yields pushing 2-year highs. The BoE & more surprisingly the ECB turned particularly Hawkish while the NFP and its revisions were a blockbuster.  All eyes are now on Thursday’s US CPI reading which is expected to top 7.3%.

Central banks are clearly getting nervous about the risk of second round effects.  The RBA, BoE and ECB all turned up the heat. President Lagarde’s press conference took markets by surprise, lifting the EUR and European peripheral yields, and BoE Governor Bailey talked of Inflation at 7%+ by April.

Ukraine tensions and speculation over gas supplies to Europe in the event of an escalation of tensions with Russia continues to weigh on sentiment. The West continues to bolster the Ukraine and Russia continues to claim that their security concerns are not being taken seriously. President Macron claims President Putin has pledged no new Ukraine escalation.

In FX the USDIndex was off its highs again as the USD cooled to around 95.50. EURUSD is down from post-ECB highs at 1.1480 but holds over 1.1400 and USDJPY has moved up from 114.30 lows to test 115.50 again. Cable rallied to test 1.3600 this week and although the political turmoil in Westminster is far from over, with more calls for the PM’s resignation, the pair trades north of 1.3550. However, Sterling remains vulnerable to bouts of risk aversion.

US stock markets consolidated this week following the torrid sell-off in January. The USA500 holds back over 4,500 as mixed Earnings and some wild swings continue to dominate stock markets, with a continued churn from growth to value stocks. The driver remains the FED, and the speed and how far they are likely to raise interest rates. A 50bp rise in March cannot be ruled out.

Gold rallied through two key levels this week at $1800 and $1815 to test $1830 as the USD cooled and geopolitical tensions refused to ease. However, higher yields are likely to cap any further advances; with a breach of $1830 the next target would be $1850.

USOil prices continue to be supported by very tight supply, low inventories, and geopolitical tensions on top of concerns about further disruption. The key psychological $85.00 a barrel holds this week as prices spiked to $91.00 following the OPEC+ meeting. Today’s inventories are likely to show a build of 1.0 million barrels.

The yields remain the key driver of the markets once again. The US 10-Year Treasury Note held over the key 1.80% level and pushed as high as 1.97%, a level not seen since November 2019, which brings into play the major 2.00% line in the sand.

Click here to access our Economic Calendar

 

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

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