Focus on Buying Low and Selling High on Range Trading

Forex

Summary:

EURNZD showed a downward trend near 1.7600 at the end of last week's trading. Moving averages indicate a downtrend in 4-hour and shorter timeframes, but appear relatively neutral in daily and longer timeframes.

BUY EURNZD

EXP

EXPIRED

1.74500

Entry Price

1.79110

1.73800

1.84394 +0.00401 +0.22%

Pips

EXPIRED

1.73800

1.79107

Exit Price

1.74500

Entry Price

1.79110

Fundamentals

From the current structural trend, EURNZD appears to be nearing a potential rebound in shorter timeframes. Still, the conditions are not yet mature, suggesting that selling pressure remains significant and could lead to further declines from the current level.

As part of this week's euro forecast, we expect EURNZD to experience a slight bearish correction to test the bottom of the consolidation range formed since mid-June before experiencing some rebound. We also expect EURNZD to rise again to the key descending resistance level next month, with a short-term target below 1.7804, followed by a further decline to the demand zone around 1.7274 from May 24.

Focus on Buying Low and Selling High on Range Trading_1

Technical Analysis

A technical signal supporting the upcoming rebound in EURNZD is the market testing the RSI near the support line. The second signal is the relatively crowded downside space. Meanwhile, the price is close to the range bottom. The market is expected to close this month with a bearish candlestick with an upper shadow, followed by a potential demand for retracement next month. Multiple structural patterns suggest that the price may undergo a rally after briefly reaching a bottom.

Nonetheless, the longer-term downtrend is likely to continue following the bearish candlestick recorded this month, and the decline may resume in mid-next month. The recommended strategy is to focus on buying low and selling high.

Trading Recommendations

Trading Direction: Buy

Entry Price: 1.7450

Target Price: 1.7911

Stop Loss: 1.7380

Valid Until: Oct 15, 2024 23:55:00

Support: 1.7482, 1.7425, 1.7393

Resistance: 1.7633, 1.7728, 1.7804

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Alan

Forex

Central Bank

Summary:

The relatively hawkish Shigeru Ishiba will serve as Japan's Prime Minister, potentially pushing the Bank of Japan (BOJ) towards a more hawkish monetary policy stance, which could strengthen the yen. Meanwhile, the US dollar is in a depreciation cycle due to the Fed's rate cuts, keeping the USD/JPY outlook bearish.

SELL USDJPY

Close Time

CLOSED

143.231

Entry Price

138.400

144.600

156.302 -1.112 -0.71%

136.9

Pips

Loss

138.400

144.601

Exit Price

143.231

Entry Price

144.600

Fundamentals

Last Friday, the USDJPY pair saw an unexpected sharp decline, dropping 1.82% in a single day, closing at 142.07. We believe there are two reasons for this decline:

1. Shigeru Ishiba won the Liberal Democratic Party (LDP) presidential election and will become Japan's new Prime Minister. Ishiba is considered a relatively hawkish political figure, and the market expects that he may adopt relatively tighter monetary and fiscal policies. This shift in policy expectations could affect Japan's economic outlook and monetary policy direction, leading to yen appreciation and a decline in the USDJPY rate.

2. Market expectations for the Fed's monetary policy have shifted with anticipation of further rate cuts. The Fed's rate cut decisions reduce the attractiveness of the US dollar, as rate cuts lower dollar yields. With the BOJ's monetary policy remaining relatively stable, a narrowing of the interest rate differential between Japan and the US increases the relative returns of holding yen, which leads to capital flowing into the yen and a decline in the USDJPY rate.

Currently, although the BOJ's monetary policy remains accommodative, the hawkish shift under Ishiba's leadership may indicate a marginal turn toward a hawkish stance, increasing the yen's attractiveness and putting downward pressure on the USDJPY rate.

Technical Analysis

Japan's Incoming PM to Boost Yen Strength_1

From the daily chart, USDJPY broke above the Fibonacci retracement level at 144.84 on Thursday and Friday, but neither day's closing price held above this level. On the contrary, the asset's price fell significantly on Friday influenced by recent news, forming a bearish candle with a long upper shadow to indicate strong bearish momentum.

Currently, USDJPY has fallen back below the middle band of the Bollinger Bands, suggesting active selling pressure on the dollar. A further decline is likely to test the support around 140.00 again.

Overall, USDJPY has seen some recovery today after the decline last Friday. We will first see if the asset's price weakens under pressure around the resistance level of 143.10; if confirmed, a short entry can be considered. Otherwise, we will look at the next resistance level at 144.20. The recommended strategy is to focus on selling at highs.

Trading Recommendations

Trading Direction: Sell

Entry Price: 143.00

Target Price: 138.40

Stop Loss: 144.60

Valid Until: Oct 14, 2024 15:00:00

Support: 141.65, 140.60, 139.57

Resistance: 143.20, 144.55, 146.48

Risk Warnings and Disclaimers

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Eva Chen

Economic

Commodity

Summary:

LME copper prices have risen back to $10,000 per ton for the first time since July last year, with other industrial metals also seeing gains. A major policy shift in China has not only driven copper prices up but also led to a revaluation of all China-related risk assets.

SELL COPPER

Close Time

CLOSED

9851.850

Entry Price

9150.000

10110.000

8958.650 +76.700 +0.86%

25815.0

Pips

Loss

9150.000

10110.200

Exit Price

9851.850

Entry Price

10110.000

Fundamentals

Last Friday, LME copper prices rose to $10,000 per ton for the first time since July last year. Compared to the gains earlier this year, the macro and micro foundations for the current copper price increase are more solid, suggesting stronger support for the lower price levels of copper. Additionally, the ongoing intensification of policies in China pushing up base metal prices can be seen as a form of mean reversion.

However, when capital confronts economic reality, it could trigger a short-covering rally.

China's manufacturing activity shrank for the fifth consecutive month in September. According to data released by the National Bureau of Statistics (NBS) on Monday, China's official manufacturing Purchasing Managers' Index (PMI) was 49.8 in September, compared to 49.1 in August, 49.4 in July, and 49.5 in June.

Zhao Qinghe, senior statistician at the NBS, stated that the economic outlook in China has generally warmed up since the beginning of the year. The PMI rose to 49.8 and manufacturing activity accelerated, with high-tech and equipment manufacturing sectors continuing to lead.

According to a private survey compiled by S&P Global, the Caixin PMI for China was 49.3, compared to 50.4 in August. The Caixin data released on Monday showed that China's manufacturing sector experienced the sharpest contraction in 14 months in September, impacted by declining demand and a weak labor market.

Market Outlook: The Caixin series of reports tend to focus on exporters and private sector firms. The sharp decline in new orders is not surprising. This year, manufacturers have been engaging in fierce price competition, in order to move volume. This tends to incentivize buyers to stock up. The latest data suggests that bargain-hunters have purchased what they need for the near term. Headwinds for the manufacturing sector have continued to mount as a prolonged economic slowdown and property crisis dampen domestic demand. Meanwhile, concerns are heightened by Western restrictions on Chinese exports, including electric vehicles.

These figures are the latest in a series of disappointing Chinese economic indicators. The world's second-largest economy is still struggling with weak domestic demand, a sluggish real estate market, and rising unemployment.

China's industrial profits in August plunged by 17.8% from a year ago, marking the largest decline in over a year, according to data released by the NBS on Friday.

China's retail sales, industrial output, and urban investment growth all fell short of expectations last month, with retail sales growing by 2.1% year-on-year, and industrial output growing by 4.5% year-on-year.

Overall, the new round of gains in base metals is buoyed by increased capital flow, but when capital confronts economic reality, it may trigger short-covering. Unless the global economy achieves a soft landing amid the US rate-cutting cycle, the rally could face challenges.

"Head and Shoulders" Pattern Drives Bears Back_1

Technical Analysis

LME copper prices tested $10,168 per ton last Friday before quickly falling back below the key neckline of the "head and shoulders" pattern on Monday, showing that downside pressure is accelerating. The previous significant rally was based on the critical support area around $9,450 (the entry point for institutional investors). We expect the shift between supply and demand zones to soon drive prices back to this range. It is recommended to focus on selling at highs.

Trading Recommendations

Trading Direction: Sell

Entry Price: 9920

Target Price: 9450

Stop Loss: 10110

Valid Until: Oct 25, 2024 23:55:00

Support: 9822, 9778, 9739

Resistance: 9914, 9957, 10094

Risk Warnings and Disclaimers

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Alan

Central Bank

Commodity

Summary:

The global economy has entered a wave of interest rate cuts, driving gold prices higher; however, the recent gains in gold prices are excessive and there is a demand for a correction.

SELL XAUUSD

Close Time

CLOSED

2659.00

Entry Price

2597.00

2671.50

2623.41 +28.97 +1.12%

125.0

Pips

Loss

2597.00

2671.57

Exit Price

2659.00

Entry Price

2671.50

Fundamentals

The global economy has been sluggish recently, and due to concerns over slowing economic growth, major central banks like the ECB and the Fed have cut interest rates, initiating a wave of global rate cuts. This has led to a surge in market risk aversion, causing gold, a safe-haven asset, to rise sharply. Data shows that gold prices have so far increased by nearly $200 throughout September.

The movement of gold prices is largely influenced by Fed monetary policy. On September 18, the Fed began its first rate cut to unexpectedly cut rates by 50 basis points, which heightened market expectations of more accommodative policies from the Fed in the future. However, Fed Chair Jerome Powell quickly clarified that the 50 basis point cut does not signal a new pace of rate reductions. Faced with this signal, investors are adjusting to the possibility of future rate cuts but remain cautious about making new directional bets on gold.

From a market sentiment perspective, the mood is slightly cautious, with investors mainly waiting for Fed Chair Powell's upcoming speech and the non-farm payroll data in October. This data may trigger the next phase of the gold market.

Technical Analysis

Looking back at last Friday's movement, gold closed at $2,658.04, down 0.53% for the day with an intraday high of $2,674.35. However, this upward momentum did not last and showed a balance of forces between bulls and bears.

From the daily chart, gold remains in a high consolidation pattern, and the overall uptrend remains intact.

Although short-term moving averages show signs of turning downward, medium- to long-term moving averages are still trending upward, indicating a strong long-term outlook for gold.

The Bollinger Bands and other indicators are also running upward, with a golden cross formed in the MACD to move upward and provide momentum for the bulls.

Overall, gold is still in a bullish trend, but the recent gains have been excessive, which increases the risk of a short-term correction based on past technical analysis. The initial pullback target is around $2,590.00. In terms of trading strategy, it is recommended to sell at highs.

Trading Recommendations

Trading Direction: Sell

Entry Price: 2659.00

Target Price: 2597.00

Stop Loss: 2671.50

Valid Until: Oct 14, 2024 15:00:00

Support: 2634.74, 2613.47, 2589.32

Resistance: 2644.98, 2654.94, 2665.76

Risk Warnings and Disclaimers

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Eva Chen

Economic

Commodity

Summary:

After silver bulls reached a 12-year high of $32.72 per ounce last Friday, profit-taking by bulls and a series of false breakouts led to the inability of the market to sustain the uptrend. It is expected that the asset will return to a consolidation range in the short term.

SELL XAGUSD

Close Time

CLOSED

31.252

Entry Price

28.730

32.750

29.524 +0.505 +1.74%

149.8

Pips

Loss

28.730

32.802

Exit Price

31.252

Entry Price

32.750

Fundamentals

Although gold has received much attention this year for hitting consecutive all-time highs, it is not the best-performing asset in the precious metals sector. Instead, this title belongs to silver.

While "the other precious metal" failed to maintain gains above $32.00 per ounce, it managed to close at its highest weekly level in 11 years. December silver futures closed at $31.81 per ounce on Friday, up 1% from the previous week.

Year-to-date, silver prices have risen over 32%, while gold prices have increased nearly 29%.

The short-term outlook that drove silver prices higher showed "strong demand" last week after China announced its most aggressive stimulus package since the COVID-19 pandemic in 2020. Last week, the Chinese government announced a 1 trillion yuan capital injection into the country's largest state-owned banks. Simultaneously, the People's Bank of China began cutting interest rates significantly. These policy changes aim to stimulate an economic recovery, which boosted the prices of base metals, thereby supporting silver prices.

However, China's economic recovery could be a double-edged sword. China's economic data for September was mixed, with continued contraction in manufacturing and weakening momentum in the services sector.

The National Bureau of Statistics reported on Monday that the manufacturing PMI rose slightly from 49.1 in August to 49.7 in September, above expectations of 49.5 but still below the 50 threshold, indicating a contraction in manufacturing for the fifth consecutive month. Export orders continued to weaken, with the sub-index for new manufacturing export orders falling from 48.7 to 47.5.

Meanwhile, the non-manufacturing PMI fell from 50.3 to 50.0, marking the end of 20 consecutive months of expansion. In the non-manufacturing sector, construction showed a marginal improvement, with the sub-index rising to 50.7, but the services sector slipped into contraction, falling from 50.2 to 49.9.

The Caixin Manufacturing PMI also showed a similar trend, falling from 50.4 to 49.3, the lowest since July 2023, while the Caixin Services PMI also underperformed, dropping from 51.6 to 50.3, a 12-month low. The Caixin Composite PMI fell from 51.2 to 50.3, reflecting a general weakness in both the manufacturing and services sectors.

Overall, the manufacturing sector in September experienced worsening conditions, with limited supply expansion and significant demand contraction. Business confidence also fell to its lowest level in recent years, which may be another reason the market failed to sustain the uptrend.

As for the false breakout in silver prices last week, this may have been largely influenced by the speculative nature of the asset. Considering that silver price is relatively cheaper compared to gold, I believe silver has outperformed gold. However, it should be noted that a correction is imminent, so I do not expect much upside potential in the short term.

Bears Eager to Return Following a 12-Year High_1

Technical Analysis

Due to silver's highly speculative nature and a series of false economic booms, there were signs of a "pump-and-dump" pattern in silver prices from last Friday until now, which prevented the market from sustaining its strength even after reaching a 12-year high.

Now that a "head and shoulders" pattern has formed in both the one-hour and four-hour charts for this asset, we expect the market to continue its downward momentum until it reaches the midpoint of the wide fluctuation range.

The 20-day and 50-day SMAs will provide support at $29.90 and $29.00, respectively. If the price breaks below $29.00, the downtrend may continue toward the tentative 2024 support trendline at $27.80 and the 200-day SMA at $27.12.

Trading Recommendations

Trading Direction: Sell

Entry Price: 31.50

Target Price: 28.73

Stop Loss: 32.75

Valid Until: Oct 15, 2024 23:55:00

Support: 31.06, 30.06, 29.73

Resistance: 31.50, 31.87, 32.29

Risk Warnings and Disclaimers

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Adam

Commodity

Summary:

Gold (XAU/USD) is in a short-term correction today, currently trading around $2,641 USD. Divergence signs on the CCI indicator and the price suggest a possible bullish reversal...

BUY XAUUSD

Close Time

CLOSED

2643.49

Entry Price

2665.00

2630.00

2623.41 +28.97 +1.12%

134.9

Pips

Loss

2630.00

2629.85

Exit Price

2643.49

Entry Price

2665.00

Market Overview

Investors are still awaiting key data from the US, including jobs figures and remarks from Federal Reserve (Fed) Chairman Jerome Powell, which are expected to have a major impact on gold price action next week.

Gold prices have fallen below $2,650 after hitting a record high of $2,685 last week. Currently, gold is trading around the key support zone of $2,616.25, which represents a 50% recovery from the recent strong rally. On the macroeconomic front, attention is focused on US labor market data, which will be released this week, especially the Non-Farm Payrolls figure. Any signs of weakness in the labor market could push the USD lower and support gold prices.

Market psychology

The gold market is reflecting caution as investors await the results of upcoming economic reports. At the same time, geopolitical tensions in the Middle East are boosting safe-haven demand for gold. Israeli airstrikes in Yemen and Lebanon have increased tensions, keeping gold prices steady at high levels despite a slight correction.

Technical analysis

XAU/USD: Dấu Hiệu Phân Kỳ Tăng Giá Xuất Hiện_1

Technical analysis shows that XAU/USD is forming a bullish divergence between price and CCI indicator, which indicates that selling pressure is weakening. If gold price continues to hold the support level of $2,616, there is a high possibility of a recovery. The important resistance level is at $2,685, if broken, gold price could advance to $2,700 in the short term. However, if selling pressure continues and price breaks $2,616, gold could fall further to levels below $2,550.

Given the macro factors and upcoming data, investors should be cautious with their buying decisions. It is recommended to closely monitor the $2,616 support level and consider opening long positions when there are clear signs of recovery from this price zone. Conversely, if the price breaks the support level, prioritize short positions.

Trading Recommendations:

Entry: 2643.5

Take Profit: 2654

Stop Loss: 2630

Risk Warnings and Disclaimers

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Adam

Forex

Summary:

On September 30, 2024, the USD/CHF pair continued to maintain a strong downtrend due to the weakening of the USD. Economic and geopolitical factors, including negative signals from the USD index and downward pressure from the US market, reinforced the bearish view...

SELL USDCHF

EXP

EXPIRED

0.84200

Entry Price

0.83500

0.84400

0.89276 -0.00488 -0.54%

Pips

EXPIRED

0.83500

0.84546

Exit Price

0.84200

Entry Price

0.84400

Market Overview

USD/CHF is currently in a bearish correction after failing to break above key resistance levels in the past weeks. The weakness in the USD reflects economic pressures from the US, including weak inflation data and expectations that the Fed may pause its interest rate hikes in the near term. This has created selling pressure on USD/CHF, pushing the pair closer to the 0.8400 support level.

Market psychology

Investor sentiment towards the USD/CHF pair is currently biased towards the downside, especially as the USD Index shows a significant decline. Investors are looking for safer assets such as CHF as there are signs of weakness in the US economy. In addition, with the unstable geopolitical situation, especially in the European region, CHF becomes a safe haven, further putting the pair under selling pressure.

Technical analysis

USD/CHF: Xu hướng giảm vẫn chiếm ưu thế_1

Bollinger Bands show USD/CHF is below the center line of the Bollinger Band, signaling that selling pressure remains strong. The bands are also expanding, suggesting that price volatility may increase and the downtrend will continue in the short term.

The CCI is at -80.85, indicating that the pair is oversold, but there is no clear sign of recovery. This could signal a further decline before any correction occurs.

Currently, the important support level is 0.8400, if the price breaks below this level, the downtrend may accelerate to 0.8350. With the downtrend still dominant, investors should be cautious with buying orders at this stage. The recommendation is to sell when the price continues to fall to 0.84160 and consider closing the order when reaching the nearest support level of 0.8350. Investors need to monitor more signals from the USD index and the US economic situation to have a suitable strategy.

Trading Recommendations:

Entry: 0.84200

Take Profit : 0.8350

Stop Loss : 0.8450

Risk Warnings and Disclaimers

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Focus on Buying Low and Selling High on Range Trading

Fundamentals

Technical Analysis

Trading Recommendations

Japan's Incoming PM to Boost Yen Strength

Fundamentals

Technical Analysis

Trading Recommendations

"Head and Shoulders" Pattern Drives Bears Back

Fundamentals

Technical Analysis

Trading Recommendations

Long-term Outlook Remains Bullish with Excessive Short-Term Gains and Increasing Risk of Correction

Fundamentals

Technical Analysis

Trading Recommendations

Bears Eager to Return Following a 12-Year High

Fundamentals

Technical Analysis

Trading Recommendations

XAU/USD: Bullish Divergence Signs Appear

USD/CHF: Bearish Trend Still Dominant

Market Overview

Market psychology

Technical analysis

Risk Disclosure