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USD/JPY carry trade explainedCurrently, the USD/JPY pair is trading around 154.26, influenced by upcoming policy decisions from the US Federal Reserve and the Bank of Japan (BoJ). The US Fed's anticipated 25bps rate cut could potentially narrow the interest rate gap, affecting the carry trade's immediate appeal. However, the strong performance of the US economy, with robust job growth and rising inflation, might sustain the dollar's strength, keeping the carry trade attractive. Meanwhile, the BoJ's steady interest rate at 0.25% and potential for future hikes offer a contrasting backdrop, maintaining the yen's role as a low-interest currency. Global economic uncertainties and political changes in both the US and Japan could impact these dynamics, so traders should monitor central bank signals and economic data closely to navigate potential shifts in the carry trade's profitability.
by tastyfx
Euro slips, Pound outperforms | FX ResearchAs we come into the North American open, the US dollar remains in the driver's seat and is up pretty much across the board. Dollar demand is also found company in US equity futures, pointing to a lower open. But overall, with stocks trading just off record highs, the setbacks aren't anything to write home about. Euro weakness can be attributed to the lowest German IFO reading in over four and a half years. As for the exception mentioned, we have seen some relative strength in the pound on the back of solid UK employment data that also continues to show wage growth coming in above forecast. This has helped confirm expectations for a BoE rate hold this week. Looking ahead, we get Canada inflation and housing data, US retail sales, industrial production, business inventories, NAHB housing, and the New Zealand GDT auction. The Canadian dollar is trading at its own multi-month lows against the US dollar on the combination of a souring economic outlook and disruption within the government involving a number of key resignations. For the exact date and time of these major economic events, import the BlackBull Markets Economic Calendar to receive alerts directly in your email inbox. Exclusive FX research from LMAX Group Market Strategist, Joel Kruger
by BlackBull_Markets
"GBP/USD Short Setup: High Risk-to-Reward with 15-Minute Candle "This GBP/USD short position offers a strong risk-to-reward ratio. The stop loss is set near 1.27518, while the target is significantly lower, around 1.24980. Currently, price consolidates near 1.27103, and I’m waiting for momentum confirmation on the 15-minute candle. Once a bearish confirmation candle closes, I’ll consider this position active. The risk zone is clearly defined above resistance, and the potential for downside is supported by recent price action and volume behavior. The RSI is also moving downward, suggesting weakening buying pressure. Waiting for further confirmation ensures a higher probability setup."
Short
by sinaaf
EURGBP Wave Analysis 17 December 2024 - EURGBP reversed from resistance level 0.8300 - Likely to fall to support level 0.8225 EURGBP currency pair recently reversed down from the key resistance level 0.8300 (former strong support from October) intersecting with the 61.8% Fibonacci correction of the downward impulse from November. The downward reversal from the resistance level 0.8300 continues the active short-term impulse wave (v) from the middle of November. Given the strong daily downtrend and bullish sterling sentiment seen today, EURGBP currency pair can be expected to fall further to the next support level 0.8225 (low of the previous impulse wave i).
Short
by FxProGlobal
$EURNZD at Key Resistance – Watch for Bearish Gartley to 1.81PEPPERSTONE:EURNZD Technical Analysis: The EURNZD pair is currently under pressure, with the daily resistance at 1.8237 being tested. The weekly fractal resistance remains just above at 1.8274. We also have a bearish Gartley pattern projected at 1.8488, at the 127% Fibonacci extension, just above the resistance zone. If the price reaches this level, the formation of the bearish Gartley pattern could lead to a retracement, pushing the pair back to the Fibonacci levels below 1.81. Key Highlights: Daily resistance being tested at 1.8237. Weekly fractal resistance at 1.8274. Bearish Gartley pattern projected at 1.8488. If the price hits this level, the bearish Gartley pattern could lead to a retracement back to Fibonacci levels below 1.81.
Short
by Andre_Cardoso
EUR/USD Clings to Key Support Ahead of Fed DecisionEUR/USD is holding its breath at a significant support level as the Federal Reserve gears up for tomorrow’s interest rate decision. The market is balancing what feels like a finely poised mix: sticky inflation, resilient US economic data, and the risk of overly aggressive policy easing. In short, the market is jittery, and EUR/USD is reflecting that perfectly. The Technical Picture Let’s take a step back. After the steady decline through the second half of the year, EUR/USD has spent the past month consolidating near the October 2023 lows. This long-term support level has held firm so far, but the price action is far from convincing. We’ve already seen two false breakouts recently. At the end of November, there was a fake dip below support, quickly followed by an equally fleeting move above the range earlier this month. These two extremes set the boundaries of the current consolidation phase and tell us one thing—EUR/USD is coiling up, and something’s got to give. Adding to the tension, the top of the recent range now lines up with the descending trendline that’s defined the pair’s medium-term downtrend. This confluence of technical factors puts EUR/USD in a tight corner just as the Fed is about to weigh in. EUR/USD Daily Candle Chart Past performance is not a reliable indicator of future results Zoomed View: EUR/USD Daily Candle Chart Past performance is not a reliable indicator of future results Scenarios to Watch 1. Dovish Cut – The Fed Eases Off the Brakes If Powell and the team deliver a quarter-point cut and hint at a more accommodative stance next year, EUR/USD could finally catch a bid. A clean break above the descending trendline and recent range highs would signal a shift in momentum, with the 200 day moving average quickly coming into focus as the next area of interest. 2. As-Expected but Cautious – Status Quo for Now The more likely scenario is a measured quarter-point cut paired with Powell keeping his cards close to his chest. If the Fed reiterates a gradual approach and avoids overpromising future cuts, EUR/USD could stay stuck in its current range. In this case, the October lows remain the line in the sand, with the pair trudging sideways until there’s more clarity. 3. Hawkish Tilt – The Fed Pushes Back If Powell leans more hawkish—acknowledging the resilience of the US economy and refusing to commit to further easing—EUR/USD could crack. A decisive break below the October lows would clear the way for a fresh leg lower. Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.67% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
by Capitalcom