CURRENCIES:

EUR/USD and Oil Breakout Potential: Awaiting a breakout above Fibonacci resistance levels for bullish trend continuation.

Popular Strategy: Breakout trading aims to capitalize on significant price movements beyond established price boundaries.

Breakout Significance: Indicates strong buying or selling activity, hinting at a market sentiment shift and potential new or continuing trends.

Breakout Trading Essentials:

• Initiate trades post-breakout to leverage momentum.
• Place orders beyond support/resistance levels for confirmation.
• Employ stop-loss to minimize risks from false breakouts.
• Set profit targets based on technical analysis projections.

Key Breakout Observations:

• Typically accompanied by increased trading volume.
• Risk management is crucial due to the possibility of false breakouts.
• Can signify the beginning of a new trend or continuation of an ongoing one.

Current Focus: Monitoring EUR/USD and oil (WTI futures) for potential breakout opportunities.

STOCK MARKET:

March Jobs Report Overview:

• Expected to reveal a slowdown in hiring.

• Anticipated decrease in unemployment rate to 3.8%.

Publication Details:

• Reported by Josh Schafer on April 4, 2024, at 10:50 PM GMT+3.

Market Context:

• Follows two months of strong job gains, surprising Wall Street.

• Bureau of Labor Statistics to release the report at 8:30 a.m. ET, Friday.

Key Figures:

• Nonfarm payrolls anticipated at +213,000 (down from +275,000 previously).

• Unemployment rate projected to drop to 3.8% (from 3.9%).

• Monthly average hourly earnings increase expected at +0.3% (up from +0.1%).

• Annual average hourly earnings growth forecast at +4.1% (down from +4.3%).

• Average weekly hours worked predicted to remain steady at 34.3.

Economic Implications:

• The report is crucial for gauging labor market strength and potential Federal Reserve policy shifts.

• Jerome Powell highlighted the labor market’s robust yet rebalancing nature.

Recent Labor Market Data:

• Job Openings and Labor Turnover Survey (JOLTS) and ADP report indicate a resilient labor market.
• Slight increase in job openings and hires observed in February.

Wage Growth Focus:

• Economists are closely monitoring wage growth as an indicator of potential inflation trends.
• March’s expected slowdown in wage growth aligns with a cooling but stable labor market.
• Investor Sentiment and Federal Reserve Outlook:

Market anticipates continued Federal Reserve rate cuts, influenced by employment and wage growth data.

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Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

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Embarking on a journey into the trading landscape can often resemble stepping into an intricate labyrinth without a guiding map. However, arming yourself with a set of strategic approaches can empower you to traverse the financial markets with assurance, unlocking avenues for monetary gains.

This guide unfolds the ten leading trading strategies making significant impacts within the forex markets in 2024, aimed at elevating your trading prowess.

Embracing Market Momentum: Trend Following Strategies

Imagine the thrill of riding a wave; the goal is to stay aboard for as long as possible. This is the core of trend following—jumping onto the market’s current momentum. Using tools such as moving averages and the moving average convergence/divergence (MACD) indicator, traders can discern market directions and join the movement effectively.

Optimizing Range Dynamics: Range Trading Strategies

Some stocks oscillate within certain price levels, reminiscent of a ball on a trampoline. This phenomenon, known as a “range,” forms the basis of range trading, where traders buy low and sell high within these confines. Instruments like Bollinger Bands and the relative strength index (RSI) aid in identifying these opportune zones.

Capitalizing on Breakouts: Breakout Trading Strategies

Breakout trading thrives on significant price movements following a break from a defined consolidation phase or range. This strategy involves taking positions as the price surges past resistance levels, leveraging the momentum. Successful breakout trading hinges on effective entry, exit, and risk management tactics.

Quick Gains: Scalping Strategies

Scalping is about accumulating small wins quickly, akin to a series of rapid, strategic strikes rather than a single knockout punch. This approach focuses on executing swift trades to capture minor price changes, requiring precise tools and swift execution to accumulate profits efficiently.

Balanced Tempo: Swing Trading Strategies

Swing trading strikes a balance, targeting market “swings” or waves for profit without the extremes of pace in trading. It’s about timing—catching the right market wave and riding it out. Tools like Fibonacci retracements and stochastic oscillators are key to identifying these opportunities.

Deciphering Price Movements: Price Action Strategies

Price action trading is akin to understanding a silent film—interpreting the market’s story through price movements alone, sans indicators. This method focuses on candlestick patterns, support and resistance levels, and overall price structure, offering a nuanced understanding of market dynamics.

Counteracting Extremes: Mean Reversion Strategies

Rooted in the principle that prices tend to revert to their mean, this strategy plays on the market’s tendency to correct itself after extreme movements. Identifying overbought or oversold conditions through tools like Bollinger Bands and RSI can signal the opportune moments to enter the market.

Harnessing Market Force: Momentum Trading Strategies

Momentum trading involves riding the wave of the market’s strongest movers, akin to setting sail with the wind in your favor. By employing indicators such as MACD and RSI, traders can detect and follow these momentum shifts towards potential profits.

Strategic Moves on News: News Trading Strategies

Trading on news revolves around the axiom of “buy the rumor, sell the news.” Significant news events can dramatically sway prices, creating opportunities for those who adeptly anticipate and react to market sentiment shifts.

Automated Precision: Algorithmic Trading Strategies

Let technology shoulder some of the burdens through algorithmic trading, where automated systems trade based on specific, pre-set strategies. This method ensures trading is conducted with unwavering precision and discipline, free from emotional biases.

In essence, mastering the forex markets is attainable through the strategic application of these ten methodologies. Incorporating these into your trading arsenal not only boosts confidence but also positions you to adeptly seize profit-making opportunities. Remember, trading success isn’t a matter of chance; it’s the result of meticulous planning, the right mindset, and strategic execution. Now is the time to dive in and begin applying these strategies to your trading endeavors. The path to becoming a proficient trader unfolds before you.

Stocks plummeted amid rising oil prices and concerns over the Federal Reserve’s interest rate policies, with major indices like the Dow Jones, S&P 500, and Nasdaq experiencing significant drops. The spike in oil prices to over $86 a barrel fueled inflation fears, while remarks from Fed officials suggested a cautious approach to rate cuts, contributing to market volatility. Meanwhile, in currency markets, the USD Index fell, the euro and pound gained, and gold prices briefly touched all-time highs, reflecting a complex interplay of economic indicators and central bank signals affecting investor sentiment.

Stock market updates

Stock markets experienced a significant downturn on Thursday, fueled by a combination of rising oil prices, mounting fears that the Federal Reserve may delay interest rate cuts, and apprehension about the upcoming March jobs report. This cocktail of concerns led to a sharp sell-off, marking the Dow Jones Industrial Average’s worst performance since March 2023, as it plunged by 530.16 points or 1.35%, settling at 38,596.98. The S&P 500 and Nasdaq Composite weren’t spared either, recording declines of 1.23% and 1.40% to close at 5,147.21 and 16,049.08, respectively, highlighting a broader market apprehension.

Amidst the trading day, a sudden spike in crude oil prices exacerbated the market’s woes, with West Texas Intermediate (WTI) crude breaching the $86 per barrel mark, a peak not seen since October. This surge sparked additional inflationary fears among investors, contributing to the market’s downturn. Complicating matters, Minneapolis Fed President Neel Kashkari’s comments added to the uncertainty, hinting at a potential reconsideration of rate cuts if inflation persists. These factors, combined with a rise in the 10-year Treasury yield to 4.305%, underscored the growing caution among investors, reflected in the day’s volatile trading patterns.

Analysts and investors alike are adopting a cautious stance, closely monitoring the 10-year Treasury yield as a key indicator of future Federal Reserve actions. The overarching sentiment is one of caution, with a focus on how the Fed’s interest rate policies and inflationary pressures will shape market dynamics moving forward.

Currency market updates

The currency markets saw varied movements as the USD Index (DXY) experienced a further decline, dipping into the sub-104.00 region. Anticipation is building for April 5, with market participants keenly awaiting the Non-farm Payrolls, Unemployment Rate, and speeches from several FOMC members. The euro maintained a positive trajectory, reaching new multi-day highs near 1.0880, while the British pound edged close to the significant 1.2700 mark, marking its third consecutive session of gains. Meanwhile, the USD/JPY pair fluctuated within a narrow range, signaling a period of consolidation.

In the commodity currency space, the Australian dollar showcased notable strength, surpassing the 0.6600 threshold, amid expectations for the upcoming Balance of Trade results. This movement reflects broader currency market dynamics, where specific data releases and economic indicators are keenly anticipated for their potential impact on currency valuations. Additionally, the trading session for WTI crude remained relatively flat, yet close to its yearly highs, indicating a sustained interest in energy markets.

Precious metals witnessed a mixed session; gold prices paused after reaching an all-time high above $2,300 per troy ounce, while silver prices ended the session with minimal changes, despite hitting new highs earlier. These movements underscore the volatility and diverse influences at play within the currency and commodity markets, as investors navigate through economic data releases, central bank communications, and broader geopolitical factors impacting market sentiment and currency valuations.

Picks of the Day Analysis

EUR/USD (4 Hours)

EUR/USD rises amid divergent central bank policies and economic outlooks

Despite a significant drop in the US Dollar, leading to a robust increase in EUR/USD to the 1.0870-1.0880 range, the currency pair’s movement reflects broader economic trends, including fluctuating US yields and a steady rise in German bund yields. Central bank policies are in the spotlight, with both the Fed and ECB expected to begin easing cycles possibly by June, although their approaches may diverge. The Fed faces challenges in curbing housing sector inflation, while the ECB grows confident about reaching its inflation target, hinting at upcoming rate cuts. However, the long-term outlook suggests a potential strengthening of the Dollar against the Euro, especially if the ECB and Fed initiate simultaneous easing, potentially driving EUR/USD down to new lows.

Chart EUR/USD by TradingView

On Thursday, the EUR/USD moved lower after reaching the upper band of the Bollinger Bands. Currently, the price is moving in the middle between the middle and upper band, suggesting a potential slight downward movement to reach the lower band before going back higher. Notably, the Relative Strength Index (RSI) maintains its position at 59, signaling a neutral but bullish outlook for this currency pair.

Resistance: 1.0858, 1.0911

Support: 1.0785, 1.0723

 Economic Data

CURRENCIES:

Euro Gains on US Data: Weaker US economic activities bolster the Euro’s position.

Inflation and ECB Rate Cut: Lower inflation in the eurozone signals a potential ECB rate cut in June.

EUR/USD Movement: Euro rises against the US dollar following dovish remarks from the Fed and weaker US data.

EUR/CHF Progress: Euro reaches a significant resistance level against the Swiss franc.

Looking Ahead:

Eurozone Inflation and Rate Cut Expectations: Decrease in March’s year-on-year inflation to 2.4% prompts anticipation of ECB’s rate cut in June.

ECB and Economic Data: Upcoming ECB meeting and economic data releases, including services PMI and March meeting minutes.

Fed’s Outlook: Observations from Fed speakers on market conditions may influence interest rate decisions.

EUR/USD Analysis:

Market Dynamics: Service sector PMI drop helps Euro, but US employment trends hint at potential Fed rate cut.

Trading Insights: EUR/USD recovers, trading above the 200-day SMA, but faces potential resistance near the 1.0950 mark.

Event Risk: Upcoming Non-Farm Payroll (NFP) data could impact currency movements.

STOCK MARKET:

Rate Cut Optimism: Markets react positively to Fed Chair Jerome Powell’s hints at possible rate cuts.

Stock and Bond Movements:

Stocks ascend, with the S&P 500 up by 0.11%.

Treasury yields decline from recent four-month peaks.

Market Drivers:

Powell’s reassurance on interest rate cuts boosts stocks and lowers Treasury yields.

European Stoxx 600 index gains 0.2%; Nasdaq 100 futures up by nearly 0.5%.

Interest Rate and Economic Outlook:

Powell’s stance on inflation influences Treasury yields and the dollar index.

Market anticipates Fed’s interest rate cuts, despite strong recent economic data.

Market Sentiment and Predictions:

Some caution remains with upcoming US payroll data.

Swap markets show uncertainty about the extent and timing of Fed rate cuts.

Global Perspective:

Euro-area bond yields drop, expecting ECB to start easing in June and further cuts by year-end.

Commodity Price Trends:

Brent oil and copper prices surge, indicating strong commodity market.

Gold price nears record highs, reflecting inflation concerns.

Sector-Specific News:

Semiconductor stocks like Micron Technology and AMD gain amid earthquake impact assessments in Taiwan.

TSMC reports no critical damage from the quake, signaling stability in semiconductor supply.

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Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

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On Wednesday, the Dow Jones experienced a slight decline, continuing its downward trend for the third consecutive day, while the S&P 500 and Nasdaq saw modest gains. Market fluctuations were influenced by individual stock performances, such as Intel’s significant drop, and broader economic indicators pointing towards a resilient economy, which in turn affected investor sentiments regarding the Federal Reserve’s interest rate policies. In currency markets, the US dollar faced pressure, with notable movements against the Euro, British pound, and Australian dollar amidst geopolitical tensions and commodity price rallies. Investors remain cautiously optimistic, balancing between the best first quarter since 2019 and the potential for a volatile period ahead as markets adjust to recent gains and anticipate the Federal Reserve’s next moves.

Stock market update

The Dow Jones Industrial Average experienced a slight decline on Wednesday, continuing its struggle to break free from the slump that has characterized the second quarter. The Dow fell by 43.10 points, a 0.11% drop, closing at 39,127.14, marking its third consecutive day of losses. In contrast, the S&P 500 managed a slight increase of 0.11%, closing at 5,211.49, its first gain of the week, while the Nasdaq Composite saw a 0.23% rise, ending the day at 16,277.46. The downturn for the Dow was primarily due to a significant over 8% drop in Intel shares following the announcement of operating losses in its semiconductor manufacturing sector. Despite a positive trend for most of the day, artificial intelligence leader Nvidia ended in the red, hampering the overall market gains. However, substantial increases in major technology stocks like Netflix, up by 2.6%, and Meta Platforms, with a 1.9% gain, provided some support to the market.

Interest rates have continued to place pressure on the stock market. The release of ADP data on Wednesday indicated a higher-than-expected increase in private payrolls for March, signaling a resilient economy but also heightening investor anxiety over the Federal Reserve’s interest rate policies. Comments from Federal Reserve officials dampened hopes for early rate cuts, with Atlanta Fed President Raphael Bostic suggesting a potential rate decrease not occurring until the fourth quarter. Fed Chair Jerome Powell emphasized the need for more evidence of inflation easing before any reduction in borrowing costs. Market predictions now lean heavily towards unchanged rates at the Fed’s May policy meeting, with a diminishing likelihood of a cut by June, as reflected in the shifting odds according to the CME FedWatch Tool and Fed funds futures data.

Despite the challenging start to the quarter, some market analysts remain optimistic, viewing the recent downturn as a period of consolidation after a strong first quarter, the best since 2019 for the S&P 500.

Currency market update

The US dollar experienced additional downward pressure, challenging the 104.00 level as measured by the USD Index (DXY). Upcoming economic data includes February’s Balance of Trade results and weekly Initial Jobless Claims on April 4, alongside speeches from Fed members Barkin, Goolsbee, and Mester. The Euro gained momentum against the dollar, pushing towards the significant 200-day SMA at the 1.0830 region, with market participants looking forward to the final HCOB Services PMIs from Germany and the euro area, as well as the release of the ECB Accounts on the same day. Meanwhile, the British pound surged to new multi-day highs beyond the 1.2600 mark, aligning with the 100-day SMA, ahead of the final S&P Global Services PMI announcement for the UK.

The Japanese yen maintained a steady position against the dollar, staying below the 152.00 mark, with investors eyeing the upcoming release of weekly Foreign Bond Investment figures in Japan. The Australian dollar saw increased buying interest, surpassing the crucial 200-day SMA around 0.6545, with the final Judo Bank Services PMI report due on April 4. In the commodities market, ongoing geopolitical tensions drove West Texas Intermediate (WTI) oil prices to new 2024 highs, exceeding the $86.00 per barrel mark. Safe-haven demand, coupled with anticipations of Federal Reserve rate cuts in June, propelled gold prices to a record peak near the $2,300 per troy ounce, while silver prices continued their rally, reaching new highs just above the $27.00 level per ounce for the first time since June 2021.

Picks of the Day Analysis

EUR/USD (4 Hours)

EUR/USD surges amid diverging central bank policies and mixed economic signals

The EUR/USD pair experienced a significant upswing, breaking past the 1.0800 mark and nearing the 200-day SMA, driven by a noticeable decline in the US Dollar amidst contrasting movements in US and German bond yields. Despite the Federal Reserve and the European Central Bank both indicating the onset of easing cycles potentially beginning in June, divergences in their approach could lead to varied strategies. This period saw mixed messages from Fed officials on interest rate adjustments, amidst indicators suggesting a softer economic landscape in the eurozone but expectations of a resilient US economy. These dynamics, coupled with inflation data below expectations in the euro area, hint at a complex interplay of economic factors influencing the EUR/USD trajectory, with a potential shift towards a stronger Dollar in the medium term as both central banks embark on easing measures, potentially driving the pair to revisit its recent lows.

Chart EUR/USD by TradingView

On Wednesday, the EUR/USD moved higher, able to reach the upper band of the Bollinger Bands. Currently, the price is moving slightly below widen the upper band, suggesting a potential another upward movement to reach the resistance level. Notably, the Relative Strength Index (RSI) maintains its position at 67, signaling a bullish outlook for this currency pair.

Resistance: 1.0858, 1.0911

Support: 1.0785, 1.0723

Economic Data

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Starting from April 07, 2024, the trading hours of some MT4/MT5 products will change due to the upcoming Daylight Saving Time change in the AU.

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CURRENCIES:

US Dollar Performance and Key Currency Pairs

• The U.S. dollar (DXY index) decreased slightly (-0.2% to 104.75), retracting from a five-month high.
• Global yield increases outpaced U.S. government rates, affecting the dollar’s strength.
• Upcoming Economic Events and Market Focus
• Attention is on the upcoming March U.S. jobs report (nonfarm payrolls) due Friday.
• This data is crucial for assessing the labor market and influencing Federal Reserve policies.

Technical Analysis for Currency Pairs

• The article examines the technical outlook for EUR/USD, USD/JPY, and USD/CAD.
• Labor Market and Monetary Policy Expectations
• Market anticipates a 200,000 increase in U.S. employment for March, maintaining a 3.9% unemployment rate.
• Potential for higher than expected job growth, affecting Federal Reserve rate cut expectations.

Implications of Nonfarm Payroll (NFP) Report

• A strong NFP result may lessen the likelihood of a significant Fed rate cut in 2024.
• Conversely, a weak NFP could prompt expectations for earlier Fed rate cuts, possibly weakening the U.S. dollar.

STOCK MARKET:

• Declining Market Share in China
• Tesla’s market share in China has decreased from 10.5% in Q1 2023 to around 6.7% by December.
• This reduction reflects intensified competition and weaker consumer demand in China.

Comparison to Local Competitors

• Tesla faces strong competition from local Chinese EV manufacturers like BYD, Nio, Xpeng, and Xiaomi.
• Rivals are offering diverse and technologically advanced models, while Tesla has mainly relied on its older Model 3 and Model Y.

Impact of Price Strategies

• Tesla’s previous price cuts have been countered by aggressive pricing from Chinese automakers.
• Tesla announced a price hike, prompting competitors to deepen their discounts.
• Slowing EV Market Growth in China
• Growth in China’s EV market is slowing, with a 25% increase projected for this year, down from previous years.
• This slowdown has led Tesla to cut production at its Shanghai factory.

Recent Sales Figures

• Tesla delivered 89,064 vehicles in China in March, a slight increase from February but consistent with March 2023 figures.
• Globally, Tesla missed its delivery target by a significant margin, marking a challenging period for the company.

Start your CFD Shares Trading journey with VT Markets now!

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].