r/fundamental-analysis

GBPUSD:

A month without swaps on majors!

The pound starts the session in a mixed internal context after statements from Bank of England representatives. Andrew Bailey emphasized that a new rate hike is not predetermined, while Dave Ramsden described internal inflationary pressures as relatively moderate. These signals are capping the pound, although expensive oil raises the risk of renewed inflation acceleration and limits room for policy easing.

Dollar weakness remains a more significant short-term factor. Its index fell to a nearly two-week low, and the market is awaiting Friday's US inflation data, which could alter the assessment of the Fed's September decision. With no clear bias toward a rate hike over a pause scenario, the dollar struggles to form a sustainable recovery against major currencies.

For GBPUSD, the local backdrop is less favorable than for the euro, making growth potential appear more limited. However, cautious signals from the Bank of England have not yet outweighed the broader dollar momentum, and rising energy prices reduce the likelihood of the British regulator quickly shifting to a more dovish policy. Under current conditions, moderate GBPUSD strengthening remains the priority.

Trading idea: BUY 1.3545, SL 1.3510, TP 1.3615

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U.S. inflation has once again forced investors to reassess their expectations for the Fed’s interest rate policy. The PCE price index — the central bank’s key inflation gauge — rose 3.7% year over year in July, while the core reading, excluding food and energy, remained at 3.3%. Both figures are still well above the Fed’s 2% target.

The market reaction has been cautious. The dollar is holding near an eight-day high, while the probability of a Fed rate hike as early as September is now estimated at around 40%. Investors are now turning their attention to Jackson Hole, where Fed Chair Kevin Warsh will speak on August 28.

The Economy Is Giving the Fed No Easy Choice:

High inflation usually calls for tighter monetary policy, but the U.S. economy is simultaneously sending mixed signals.

In the second quarter, U.S. GDP grew by just 1.5% year over year. On the other hand, domestic demand proved more resilient than initially estimated, corporate profits increased, and business investment continues to receive support from massive spending on artificial intelligence.

As a result, the Fed has to choose between two risks: another rate hike could slow the economy even further, while a policy that is too accommodative could allow inflation to remain significantly above the target level.

Everything Now Depends on Jackson Hole:

The key event will be Kevin Warsh’s speech on August 28. Above all, the market will be looking for an answer to one question: how seriously is the Fed prepared to fight inflation if price growth remains around its current levels?

A more hawkish tone could strengthen the dollar and push U.S. Treasury yields higher. For #SP500 and #NQ100, such a scenario would create additional pressure, as higher interest rates make borrowing more expensive and reduce the appeal of growth stocks.

If the Fed Chair instead signals that another rate hike can be avoided, the market reaction could be the opposite — the dollar could come under pressure, while stock indexes could receive support.

According to FreshForex analysts, the Fed is unlikely to give the market a reason to expect an imminent policy easing: inflation at 3.7% remains too high, making a signal of persistently high rates and a willingness to raise them again if inflation fails to slow the most likely scenario. For traders, this means a stronger dollar and increased downside risk for #SP500 and #NQ100, particularly the technology sector, which is the most sensitive to expensive financing.

Event to watch today:

17:00 EET. USD - Federal Reserve Board Chair Kevin Warsh will deliver a speech

EURUSD:

A month without swaps on majors!

The euro begins the European session near weekly lows as the market approaches Federal Reserve Chair Kevin Warsh's speech with heightened attention to inflation risks in the US. Several Fed officials recently reiterated the need to maintain a firm stance against price pressures, and the probability of a rate hike by year-end has increased. This supports the dollar and limits EURUSD recovery.

The local backdrop for the euro appears mixed. Market participants are awaiting fresh data on inflation and economic activity in France, which could adjust expectations for the ECB. However, until their release, the European currency lacks a new confirmed driver capable of outweighing the dollar's strength. Current ECB policy expectations provide some support for the euro, but they do not yet alter the overall balance of the current session.

The key factor remains the market's reaction to signals from the Fed at Jackson Hole. If Warsh confirms the priority of fighting inflation and does not soften rate expectations, demand for the dollar is likely to persist. A softer rhetoric would pose a risk to this scenario, but until such a signal appears, the basic fundamental backdrop favors further decline in EURUSD.

Trading idea: SELL 1.1650, SL 1.1680, TP 1.1575

Event to watch today:

15:30 EET. USD - Change in GDP quarter over quarter

USD​JPY:

The yen is receiving fresh fundamental support following an acceleration in inflation within Japan’s services sector. The Services Producer Price Index rose by 3.6% year on year in July, up from a revised 3.4% in June, strengthening the case for further interest rate increases by the Bank of Japan. This is important for USDJPY because expectations of faster policy tightening reduce part of the dollar’s previous interest-rate advantage.

A recent survey of economists showed a notable shift in expectations: the majority now see the possibility of the Bank of Japan raising its policy rate to 1.25% as early as September, while the market is close to fully pricing in such a move. The yen’s sensitivity is also supported by the recent joint intervention by Japan and the United States in the foreign exchange market, which keeps attention focused on excessive weakness in the Japanese currency.

There is currently no strong opposing impulse from the dollar. The US currency is trading in a narrow range ahead of the July Personal Consumption Expenditures price index and fresh Federal Reserve signals, while the latest Japanese data are strengthening expectations for the Bank of Japan. As a result, the base-case scenario allows for a decline in USDJPY if the current repricing of interest rate expectations continues.

Trading idea: SELL 159.05, SL 159.45, TP 158.15

The cryptocurrency market has delivered one of its strongest recoveries in recent months. Bitcoin (BTCUSD) climbed above $80,000 for the first time since mid-May, gaining 23.6% over the past week—its second-best weekly performance since the beginning of 2021.

The rally extended across the market. Ethereum (ETHUSD) advanced more than 31% during the week, while Ripple (XRPUSD) surged by around 50%. At the same time, U.S. spot crypto ETFs recorded approximately $2.6 billion in net inflows, marking their strongest weekly result since last October.

What Drove the Rally?

1. Institutional investors returned. Bitcoin ETFs attracted approximately $1.9 billion in net inflows during the week, while Ethereum ETFs added nearly $700 million. The return of institutional demand has become one of the defining features of the current rally, setting it apart from previous short-lived rebounds.
2. U.S. Treasury yields declined. The U.S. Treasury expanded its long-term bond buyback program, helping ease pressure from elevated interest rates on risk assets and encouraging investors to return to cryptocurrencies.
3. The U.S. dollar weakened. A softer dollar traditionally boosts the appeal of alternative assets. In this environment, Bitcoin is increasingly being viewed alongside gold as an asset that may benefit from concerns about currency depreciation.
4. Short sellers were caught off guard. Before the rally, Bitcoin had spent nearly six weeks trading in a narrow range, with many traders expecting the downtrend to continue. The breakout above resistance triggered a wave of short-covering, adding further momentum to the advance.

The technical picture has improved. Both Bitcoin and Ethereum have moved back above their 200-day moving averages, a level widely used to assess long-term market trends. Meanwhile, Ethereum has recently been outperforming Bitcoin, a pattern that often signals growing risk appetite across the broader cryptocurrency market.

According to FreshForex analysts, now that Bitcoin has established itself above $80,000, buyers continue to hold the advantage. If ETF inflows remain strong and U.S. Treasury yields continue to ease, BTC could move toward the $85,000–90,000 range. Should the current momentum persist, the market may once again begin discussing the possibility of Bitcoin returning to the $100,000 level.

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XAUUSD: BUY 4620.00, SL 4580.00, TP 4720.00​

Gold starts the week with sustained demand amid a weaker US dollar and renewed concerns about the stability of the US debt market. The US Treasury’s decision to increase buybacks of long-term bonds after the 30-year yield climbed toward multi-year highs has strengthened demand for defensive assets.

XAUUSD has already posted a notable advance, so further upside will depend on continued pressure on the dollar ahead of Federal Reserve Chair Kevin Warsh’s speech and upcoming inflation data. Elevated yields limit gold’s potential, but as long as fiscal concerns persist, the base-case scenario remains supportive of further gains.

Trading idea: BUY 4620.00, SL 4580.00, TP 4720.00

#SP500: SELL 7690, SL 7750, TP 7570​

#SP500 enters the week after declining over the previous five sessions, with high borrowing costs remaining the main constraint. Long-term US Treasury yields are holding near multi-year highs, raising the hurdle for equity valuations and creating particular pressure on the technology sector.

The market is also awaiting Nvidia’s earnings report and Federal Reserve Chair Kevin Warsh’s speech in Jackson Hole. Strong corporate results could support equities, but the combination of expensive financing, inflation risks, and uncertainty over interest rates leaves the weekly outlook vulnerable. The base-case scenario remains tilted toward further downside.

Trading idea: SELL 7690, SL 7750, TP 7570

#BRENT: BUY 93.20, SL 90.70, TP 98.20​

Brent starts the week after a strong advance, while the geopolitical risk premium remains elevated. The United States is preparing new sanctions against Iran and its trading partners, while vessel traffic through the Strait of Hormuz remains below pre-war levels. This keeps supply disruption risks in focus and supports oil prices.

Offsetting factors include higher US commercial crude inventories and the OPEC+ decision to raise September production quotas by 188,000 barrels per day. However, the IEA estimates that the market will remain in deficit during the third quarter. If supply constraints persist, the base-case weekly scenario allows for a recovery in #BRENT.

Trading idea: BUY 93.20, SL 90.70, TP 98.20

GBPUSD:

The UK economy continues to show signs of resilience despite mixed data in recent days. The preliminary services PMI rose to a six-month high of 52.8 in August, while consumer confidence reached a two-year high. This reduces the risk of a sharp deterioration in domestic demand and provides support for the pound.

UK inflation accelerated to 2.9% in July, remaining above the Bank of England’s target. At the July meeting, three of the nine committee members had already voted for a rate increase, while the market continues to price in the possibility of tighter policy before the end of the year. A 0.5% decline in retail sales and an unexpected budget deficit are limiting factors for sterling, but they do not yet change the broader picture.

The external environment is also important for GBPUSD: the US dollar remains under pressure amid concerns over US debt policy and the expansion of long-term bond buybacks by the Treasury. Strong activity in the US services sector limits the scale of dollar weakness but does not change the main impulse of the current session. As long as UK data remain resilient, the growth scenario for GBPUSD retains the advantage.

Trading idea: BUY 1.3650, SL 1.3610, TP 1.3740

Just saw the CPI numbers, and while the headline was mostly as expected, the core services component is still a bit sticky. This reinforces the 'higher for longer' narrative for rates, which, admittedly, isn't new, but it just got another stamp of approval. I'm keeping a close eye on energy plays like $XOP, currently at 189.54. If we see a sustained higher interest rate environment, that could eventually put some pressure on demand, though for now, supply dynamics seem to be holding up. On the flip side, with the yuan showing some recent stability, I'm also looking at $FXI at 35.86. If China's economy continues its slow but steady rebound, that could present some interesting opportunities, even if the broader macro picture remains complex. Just curious what others are thinking given these latest data points.

The latest Fed commentary, while still dovish-leaning, suggests a persistent watch on inflation metrics, potentially extending the higher-for-longer narrative. This makes me consider if the recent uplift in $AAXJ to 116.32 is sustainable without stronger localized economic data.

It's interesting to watch $XOP trading at 189.54, up 1.11% today, given the ongoing tug-of-war between slowing global growth narratives and surprisingly resilient demand from certain sectors. While some economic indicators are flashing yellow, the energy complex continues to find support, suggesting underlying demand remains robust enough to absorb the current supply. This persistence makes me wonder how much of the 'soft landing' or 'no landing' debate is already priced into oil and gas plays, and whether there's more upside if the latter scenario materializes.

It's interesting to see $OIL up at 28.42, a +0.96% gain today, while $XLE is actually down -0.17% at 63.64. I'm trying to figure out if this divergence is just daily noise or if it signals something more for my energy sector watchlist moving forward.

It's always a bit of a head-scratcher with the SNB, isn't it? Unlike many central banks fixated on the traditional 2% inflation target, the Swiss National Bank tends to operate with a slightly different playbook. They often prioritize price stability, which sounds similar but in practice means they might tolerate periods of lower, or even slightly negative, inflation to prevent asset bubbles or an overvalued franc. This nuanced stance is why we sometimes see $CADCHF fluctuate even when inflation numbers elsewhere are screaming for rate hikes; the SNB's decision-making process is more about the long-term health of their export-driven economy and maintaining the franc's stability, rather than just hitting a specific CPI number like it's a dartboard.

Alright, so another CPI print dropped today, and while it wasn't a total shocker, it certainly keeps the Fed in that awkward 'wait and see' phase. It's like watching a high-stakes poker game where everyone knows the Fed has a good hand, but they're still not showing their cards on rate cuts. The market's trying to price in cuts, but the underlying inflation data just isn't giving them the green light. You can see it in how some of the more rate-sensitive sectors are reacting; the rally isn't as broad as one might hope if a clear dovish pivot was truly on the horizon. Even with something like $VNM up 4.20% today, it feels more like sector-specific news or momentum rather than a clear macroeconomic tide lifting all boats.

What this means for me is keeping a very tight leash on anything that relies too heavily on aggressive rate cuts materializing sooner rather than later. I'm still favoring defensive plays and sectors with strong fundamentals that aren't purely growth-driven by cheap money. Also keeping an eye on commodities like $NATGAS, which is up a bit today to 2.773; these can be an interesting bellwether for underlying demand dynamics that sometimes get overshadowed by monetary policy debates. It's a tricky environment, certainly not one for blindly chasing headlines.

Interesting how quickly the narrative shifts. Seems like only yesterday we were pricing in perpetual rate hikes, and now the Fed's latest minutes have everyone scrambling to recalibrate their 'higher for longer' models. The subtle softening around future hikes, while not an explicit pivot, is enough to get bond traders twitchy. I'm keeping a close eye on $EURUSD for signs of capital flows reacting to this perceived change in interest rate differentials. If the market truly believes we're closer to a plateau, that could inject some life into sectors that have been battered by borrowing costs. For my part, it reinforces my caution against chasing any exuberant rallies on individual names, like today's pop in $BDL to 48.12. It's a nice move, but a single data point doesn't make a trend, especially when the underlying macro winds are still swirling with uncertainty. Positioning for choppiness, not a clear direction, still feels like the sensible play.

It's easy to get fixated on market and limit orders, but understanding the nuances of conditional orders can significantly improve execution and risk management, especially in volatile markets. Take stop orders, for instance. A basic stop-loss is straightforward: sell $NATGAS if it hits 2.700. But what about a stop-limit? This order type offers more control, converting to a limit order once the stop price is triggered. So, if you set a stop-limit to sell $NATGAS at 2.700 with a limit price of 2.690, your order only triggers at 2.700 and will execute at 2.690 or better. The downside, of course, is that in a fast-moving market, your limit order might not get filled if the price blows past your specified limit.

Then you have orders like OCO (One Cancels the Other) or OTO (One Triggers the Other). An OCO is useful for setting both a take-profit and a stop-loss simultaneously. Say you're long $EURCHF at 0.93598. You could set an OCO with a limit order to sell at 0.93800 (take profit) and a stop-loss order to sell at 0.93400. If either is filled, the other is automatically canceled. This is efficient for managing open positions without constant manual oversight. OTO, conversely, allows you to place a secondary order that only becomes active once your initial order is filled. For example, you might place a limit order to buy $FFR at 36.500, and if that fills, an OTO could activate a stop-loss order at 36.000. These aren't exotic options; they are standard tools that, when used correctly, can help prevent emotional decision-making and enforce discipline.

Many new traders think position sizing is just about how many shares you buy. It's not. It's about managing your risk per trade by calculating how much capital you're willing to lose if your stop loss is hit, and then using that to determine your share count based on your entry and stop prices. For instance, if you're risking $100 per trade and your stop on $MRVL is at $230 from an entry of $237.04, you'd be able to buy roughly 14 shares ($100 / ($237.04 - $230) = 14.28 shares), not just a random amount.

Saw $EURCHF hovering around 0.93548 today, which got me thinking about the SNB's inflation stance. With the recent dips, I'm genuinely curious if they'll feel pressure to intervene more forcefully, especially if the CPI print next week isn't as benign as some hope. It's making me keep a closer eye on Swiss exports and any subtle shifts in their rhetoric for potential entries.

Watching $CAD closely lately. Despite the general USD strength, the relative stability in crude oil prices around the $78-80 mark seems to be providing some underlying support. While the Bank of Canada has signaled a cautious approach, any sustained rebound in commodities could shift their calculus sooner than markets expect, making me think about potential entries on CAD crosses.

There's often a misconception that position sizing is simply picking a percentage of your total capital to risk per trade. While that's the starting point, the nuance comes in tying it directly to your stop loss and the total value of the trade. If you decide you're comfortable risking, say, 1% of your $100,000 account, that's $1,000. Now, for an instrument like $FXI currently at 35.86, if your stop loss is at 35.00, your per-share risk is $0.86. To determine your position size, you'd divide your total risk tolerance ($1,000) by your per-share risk ($0.86), which gives you approximately 1,162 shares. This is crucial because it directly links your maximum acceptable loss to the trade's specific parameters, rather than just buying an arbitrary amount of shares that might expose you to disproportionately higher losses if your stop is hit. It's about calibrating your exposure to the actual volatility of the trade, not just your account balance.

Without this detailed calculation, one might buy, for example, 2,000 shares of $FXI with a $0.86 stop. That would mean a potential loss of $1,720, exceeding the intended 1% risk. The math needs to be done before the trade, every single time, to maintain consistent risk management. It's not glamorous, but it's foundational.

It's not just about how much capital you've got in your account. Proper position sizing means calculating how much you're willing to lose per trade, then backing into the number of units you can buy or sell. Say you're looking at $ZS, currently trading around 181.745. If your analysis suggests a stop at 178.00 and you've decided you're comfortable losing, let's say, $200 on this particular trade, you'd calculate your permissible risk per unit (181.745 - 178.00 = $3.745). Your position size would then be $200 / $3.745, which is roughly 53 units. That's your maximum exposure, not some arbitrary percentage of your entire portfolio.

This simple approach keeps you from blowing up your account on one bad call, letting you manage risk systematically across different setups, whether you're trading commodities like $SI or currencies like $EURCHF. Without a solid handle on this, you're just gambling.

When placing a trade, you typically choose between a market order and a limit order. A market order executes immediately at the best available price, which can be useful if you prioritize speed, but you might get filled at a less favorable price, especially in volatile markets or with low liquidity. In contrast, a limit order allows you to specify a maximum buying price or a minimum selling price; it will only execute if the market reaches your specified price or better, offering price control but with no guarantee of execution. For instance, if you want to buy $AAXJ but only if it dips to 116.00, you'd place a limit buy order at that price, whereas a market order would buy it instantly around its current 116.32.

Watching $EURCHF lately, the move towards 0.936 has been interesting. It's been a slow grind up from the lows. What's catching my eye isn't so much the daily range, which has been fairly contained between, say, 0.9348 and 0.9365, but the quiet from the SNB. With the Eurozone still grappling with inflation, and the ECB's own messaging a bit hawkish, you'd think the SNB might feel some pressure to lean one way or another.

It makes me wonder if their recent interventions have achieved the desired stability for now, or if they're simply biding their time. I'm keeping it on my watchlist for any shifts in their rhetoric, as a sudden change could really add volatility here. For now, it feels like a market searching for direction, largely influenced by the perceived divergence in monetary policy paths between the ECB and SNB.

Watching $NATGAS movements today, currently down at 2.748. The slight retracement from its intraday high of 2.803 isn't particularly surprising given the recent run, but the underlying supply/demand dynamics haven't fundamentally shifted. Storage injections are still a key data point I'm tracking closely.

My watchlist positioning remains tilted towards companies with diversified energy exposure rather than pure-play gas, but I'm keeping a very close eye on the 2.70 level as potential support. A sustained break below that would make me re-evaluate the short-term thesis, even with the colder weather forecasts on the horizon. The market seems to be pricing in some of that already, so any further upside might be more constrained than some believe.

Hey folks, wanted to throw out a quick thought on risk-reward, as I still see a lot of newer traders focusing purely on the numerical ratio without digging deeper. It's easy to say "I want a 2:1 or 3:1 risk-reward" on every trade, but that's just one piece of the puzzle. The true value comes from understanding the probability of achieving that reward versus the probability of hitting your stop.

Think about it: a 10:1 risk-reward trade where your stop is tight and the probability of reaching your target is incredibly low might actually be worse than a 1:1 trade with a very high probability of success. For instance, if you're looking at something like $BIOC at 0.4349 and your target is 0.4901 from earlier today's high, but the prevailing sentiment and market structure suggest strong resistance there, your high risk-reward might be misleading. You're not just looking at points on a chart; you're evaluating the underlying market dynamics. Always weigh the statistical edge of your setup against the proposed R/R ratio. It's about finding high-probability opportunities, not just high ratios.

The $HKD has been an interesting one to observe lately, particularly with it trading around 1.7 -1.16% on the day, having bumped between 1.695 and 1.73. It's not a massive move by any stretch, but the persistent weakness, even with the HIBOR staying relatively elevated, just makes me wonder how much of this is pure rate differential and how much is underlying capital flow. It's clear the Fed's stance on rates is the elephant in the room for a lot of Asian currencies pegged or semi-pegged to the dollar. I'm keeping an eye on it not for a direct trade, but as a canary in the coal mine for broader sentiment towards the region, especially how it might impact the capital flight narrative. If we see a more sustained break, it's going to open up some questions about the stability of the peg and potentially trigger a wider ripple effect in EM FX. Not making any calls yet, just watching the tea leaves there for broader cross-asset implications.

Still sifting through the latest Fed speak and it's remarkable how consistently the hawkish undertone persists, despite what some data points suggest. While some sectors show signs of cooling, the core message remains 'higher for longer' on rates. This continued rhetoric, particularly when contrasted with other major central banks, is making me reconsider my stance on currency pairs where the interest rate differential plays a significant role. Watching $CAD closely, currently at 95.879, especially if the BoC signals any deviation from the hawkish path. Might see some sustained pressure there if the rate divergence widens further than priced in. Not seeing a clear directional catalyst for $ATOM today, just chopping around 1.5266.

Watching $USO climb to 134.54 today on supply concerns definitely has me thinking about its potential pass-through to inflation and what that means for the Fed's stance, especially with $UST trading around 41.255. It's making me re-evaluate my duration exposure a bit, considering how quickly sentiment can shift from disinflationary to stagflationary concerns.

The EIA report last week, with the significant draw, definitely has my attention on crude. It feels like the market might be underestimating demand-side resilience, even with rate hike concerns; seeing $USO pushing 135.54 today is interesting.

Positioning my watchlist to see if this momentum holds, especially given the geopolitical backdrop.

Watching $SI make a move like today, up over 10% and trading around $23.26 after opening near $20.71, is a good reminder of how quickly sentiment can shift in commodities. While the immediate catalyst might be a specific news item, understanding these larger percentage moves often comes down to fundamental supply/demand dynamics and market psychology. When we see such a strong single-day push, it’s rarely just technicals in isolation. It signals a significant re-evaluation of its underlying value proposition, whether that's due to inflation hedges, industrial demand outlooks, or even currency plays. For those looking at these moves, the question isn't just what moved it today, but why the market was so ready to respond. This is where digging into recent industrial reports, CPI data, or even Fed rhetoric becomes crucial to understanding the deeper currents at play. It's not about chasing the high, but understanding the story behind it for future opportunities.

เห็น $CADCHF ดีดตัวขึ้นมา 0.56% แถวๆ 0.58041 วันนี้ สงสัยว่าตลาดกำลังจะมองไปข้างหน้าเรื่องการขึ้นดอกเบี้ยของ BoC ในอนาคตอันใกล้หรือเปล่า? จริงๆ ตัวเลข CPI ของแคนาดาก็เริ่มน่าสนใจนะ แต่นักลงทุนจะกล้าเสี่ยงไปกับ CAD ในช่วงที่เศรษฐกิจโลกยังผันผวนอยู่มั้ย? ผมก็กำลังชั่งใจอยู่ว่าจะเก็บเข้า watchlist เพิ่มดีไหมนะ.