The stock market surged to historic heights as the Dow Jones Industrial Average closed above 37,000 for the first time, fueled by the Federal Reserve’s indication of upcoming rate cuts amidst eased inflation projections. This move drove notable gains across indices and sectors, with banking stocks like Bank of America and Wells Fargo rising significantly, alongside Home Depot, while pushing year-to-date gains for the Dow, S&P 500, and Nasdaq Composite. Simultaneously, the currency market witnessed substantial shifts, marked by the dollar index’s plunge and various currency pairs reacting to the Fed’s revised outlook, while attention turned to potential impacts on retail sales in the evolving landscape.

Stock Market Updates

The stock market soared to new heights, with the Dow Jones Industrial Average reaching a record-breaking close above 37,000 for the first time, spurred by the Federal Reserve’s indication of multiple rate cuts in the coming year. This move comes in response to the Fed’s acknowledgment of eased inflation and a revised forecast for a lower inflation rate of 2.4% in 2024, down from the previously projected 2.6%. Investors welcomed this shift in monetary policy, driving the Dow up by 512.30 points (1.40%), the S&P 500 by 1.37%, and the Nasdaq Composite by 1.38%, all hitting fresh 52-week highs. The market’s positive response was further reinforced by promising inflation data and a decrease in the 10-year Treasury yield to 4.03%, its lowest since August.

The Fed’s decision to signal forthcoming rate cuts boosted specific sectors: banking stocks like Bank of America and Wells Fargo, poised to benefit from a softer monetary policy, surged by 4% and nearly 3%, respectively. Additionally, Home Depot experienced a 3% gain, potentially due to expectations of increased sales driven by a potential housing market revival. This shift in market sentiment, aligning with investors’ desires for a more accommodating Fed stance, has significantly contributed to the Dow’s remarkable 11.9% year-to-date rise, while the S&P 500 and Nasdaq Composite have seen even more substantial gains of 22.6% and 40.8%, respectively, in 2023.

Data by Bloomberg

On Wednesday, across all sectors, the market saw a positive trend with a gain of 1.37%. Notably, the Utilities and Real Estate sectors experienced robust growth, rising by 3.72% and 3.58% respectively, outperforming other sectors. Health Care and Consumer Staples also showed healthy gains of 1.83% and 1.82% respectively. Financials, Consumer Discretionary, Energy, Materials, and Industrials followed suit with increases ranging from 1.14% to 1.61%. However, Information Technology and Communication Services had comparatively modest gains, recording 0.89% and 0.65% respectively, contributing to the overall positive market movement.

Currency Market Updates

The currency market witnessed significant shifts following the Federal Reserve’s announcements, causing a plunge in the dollar index by 0.7% during New York afternoon trade. Projections of three rate cuts in 2024, coupled with economic assessments, prompted a drop in two-year Treasury yields and futures pricing, with a notable rise in the probability of a March rate cut to 69%. The Fed’s deviation from previous dot plots, altering the trajectory from expected hikes in 2023 to anticipated cuts in 2024, marked a substantial change in market expectations. Notably, the EUR/USD pair surged by 0.85% following the Fed’s news, hitting a seven-day high, partly attributed to the European Central Bank’s projected rate cuts and the Eurozone’s economic performance lagging behind the US. Meanwhile, sterling experienced a shift from a loss to a gain, with expectations concerning the Bank of England’s stance on rate cuts diverging from the market’s projections.

Additionally, USD/JPY experienced a significant decline of 1.6% post-Fed, contrasting with its 0.2% dip ahead of the announcement. This movement aligned with lower Treasury-JGB yields following the Fed’s update, despite Japan’s positive Tankan survey and the Bank of Japan’s potential divergence as the sole major central bank possibly considering rate hikes next year. The dynamics in the currency market were influenced by oil price movements, with Brent finding support preceding June lows, driven by unexpected drops in WTI inventories and the amplified prospects of easing by major central banks, including the Fed. Looking ahead, the market’s focus shifted toward U.S. retail sales, anticipated to show soft figures, further contributing to the evolving currency landscape.

Picks of the Day Analysis

EUR/USD (4 Hours)

EUR/USD Rallies Amid Fed’s Stance, Eyes on ECB Decision

The EUR/USD pair surged more than 100 pips post the Federal Reserve meeting, breaching the 1.0900 mark on a firmly bullish trajectory driven by the US Dollar’s dip. The Fed’s decision to maintain interest rates and the projection of future rate cuts in 2024 propelled US bond rallies, pushing the 10-year yield to 4% lows and the US Dollar Index down by nearly 1%. Ahead of the European Central Bank’s anticipated decision, expectations loom around unchanged rates, discussions on PEPP reinvestment, and updated projections, foreseeing potential downgrades in growth and inflation forecasts. Market sentiment appears dovish, factoring in a possible rate cut in April, pressuring the Euro. Attention shifts to the ECB’s stance for insights into future market repositioning, with the US Dollar’s decline potentially propelling a rally toward 1.1000, tempered by the ECB decision or Eurozone PMI reports.

Chart EUR/USD by TradingView

On Wednesday, the EUR/USD moved higher and was able to reach the upper band of the Bollinger Bands. Currently, the price moving slightly above the upper band, suggesting a potential continuation movement, potentially reaching the resistance level at 1.0925. Notably, the Relative Strength Index (RSI) maintains its position at 73, signaling a bullish outlook for this currency pair.

Resistance: 1.0925, 1.1005

Support: 1.0852, 1.0760

XAU/USD (4 Hours)

XAU/USD Surges Above $2,000 as Fed’s Dovish Tone Weakens Dollar and Treasury Yields

Gold (XAU/USD) soared past the $2,000 mark amidst the early Asian session, buoyed by a weaker US Dollar and declining Treasury yields following the Federal Reserve’s meeting. The Fed maintained interest rates unchanged, adopting a dovish stance on monetary policy. Fed Chair Jerome Powell hinted at potential rate cuts, contributing to the Dollar Index’s sharp decline and boosting gold prices. Despite market expectations aligning with the Fed’s decision, the possibility of rate cuts in 2024 exceeded forecasts, intensifying interest in gold. With upcoming US economic reports and Chinese data on the horizon, gold traders anticipate further cues from jobless claims, retail sales figures, and international economic indicators.

Chart XAU/USD by TradingView

On Wednesday, XAU/USD moved higher and was able to reach the upper band of the Bollinger Bands. Currently, the price moving slightly above the upper band, suggesting a potential continuation movement, potentially reaching the resistance level at $2,041. The Relative Strength Index (RSI) stands at 68, signaling a bullish outlook for this pair.

Resistance: $2,041, $2,068

Support: $2,008, $1,985

Economic Data

Despite the S&P 500, Dow Jones, and Nasdaq reaching new peaks amidst the consumer price index (CPI) rising as anticipated, the market remains divided in response. Analysts note both bullish and bearish sentiments, with investors bracing for potential strategic investment opportunities. Oracle’s 12% decline and Macy’s 8% drop affect sector dynamics, while currency markets respond subtly to the CPI data, keeping the dollar index down. The Fed’s impending policy announcement and cues from Jerome Powell’s commentary are anticipated, influencing future rate adjustment speculations. Meanwhile, diverse currency pairs show varied movements, indicating nuanced market shifts, while attention turns to forthcoming events like US retail sales and central bank meetings impacting currency markets’ cautious stance.

Stock Market Updates

The stock market saw a continued climb as the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all rose, hitting new 52-week highs. This growth occurred despite the consumer price index (CPI) rising 3.1% year over year in November, matching economist predictions. However, the month-over-month CPI increase aligned with expectations, maintaining a steady inflation trajectory. Analysts noted that while both bullish and bearish sentiments exist about the CPI figures, the market largely responded in a manner consistent with expectations, with many investors anticipating a potential dip for strategic investments.

Investors are eagerly awaiting the Federal Reserve’s upcoming policy announcement, anticipated to maintain steady interest rates. However, the market is keenly attentive to cues from Chair Jerome Powell’s commentary, seeking indications about potential future rate adjustments. Amidst this market climate, Oracle shares dropped by over 12% due to lower-than-expected fiscal second-quarter revenue, while Macy’s declined by 8% following a downgrade to sell from Citi, impacting the market’s sectoral dynamics.

Data by Bloomberg

On Tuesday, most sectors experienced gains, with the overall market rising by 0.46%. The Information Technology sector led the gains with an increase of 0.83%, followed by Financials at 0.71% and Materials at 0.57%. Health Care and Industrials also saw positive movement, each rising by 0.47% and 0.46%, respectively. However, sectors like Energy, Utilities, and Real Estate faced declines, with Energy notably dropping by 1.35%. Utilities and Real Estate experienced smaller decreases of 0.41% and 0.05%, respectively, marking a mixed day across various sectors.

Currency Market Updates

The recent currency market updates reveal a nuanced response to the US CPI data, maintaining the dollar index down by 0.22%. Core inflation figures persisting at 4% year-on-year hindered a dovish Fed pivot signal, despite real weekly earnings experiencing a significant 0.5% surge in the month. This upturn in earnings, especially in super core services minus shelter costs, influenced Powell’s outlook, contributing to a marginal rise in Treasury yields and the dollar post-CPI.

EUR/USD witnessed a 0.24% uptick, benefiting from a weaker dollar, declining energy prices, optimistic indicators in Germany’s ZEW expectations index, and tightened bund treasury yield spreads. However, the currency pair is seeking support above specific moving averages to solidify its sizable speculative long position. Meanwhile, USD/JPY experienced a 0.4% drop from recent lows, navigating towards equilibrium after a notable November-December plunge, a portion of it attributed to an exaggerated Fed rate cut and unrealistic BoJ rate hike expectations. The overall trend remains in favor of shorts unless key resistance at 147.76 is breached, considering the historical context of a double-top formation from 2022/23 and the anticipated reversal of the Fed rate hike cycle.

The sterling remained relatively stagnant amid concerns over decelerating UK wage growth and domestic political uncertainty. Looking ahead, market attention shifts to upcoming events such as US retail sales and the ECB and BoE meetings, viewed as preludes to anticipated rate adjustments by March and June, respectively, maintaining a cautious stance in the currency markets.

Picks of the Day Analysis

EUR/USD (4 Hours)

EUR/USD Struggles Below Key Levels Amid Fed and ECB Decision Expectations

The EUR/USD made a modest ascent, yet failed to sustain levels above 1.0800, lingering below the 200-day SMA. The US Dollar’s mixed sentiment post-US inflation figures and in anticipation of the Federal Reserve’s upcoming decision fuel cautious movements. Despite the CPI aligning with expectations and the USD initially weakening, the currency regained ground. Eyes are on the Fed’s probable unchanged rates and Chair Jerome Powell’s tone. The market eyes the dot plot for 2024 projections, influencing interest rate expectations. With the ECB decision looming and expectations of a non-event, EUR/USD struggles persist amid over 50% odds of a rate cut by March, impeding potential rebounds.

Chart EUR/USD by TradingView

On Tuesday, the EUR/USD moved slightly higher and able to reach near the upper band of the Bollinger Bands. Currently, the price moving slightly below the upper band, suggesting a potential lower movement, potentially reaching the middle band. Notably, the Relative Strength Index (RSI) maintains its position at 50, signaling a neutral outlook for this currency pair.

Resistance: 1.0817, 1.0885

Support: 1.0747, 1.0664

XAU/USD (4 Hours)

XAU/USD Stable Amidst Inflation Data and Fed Anticipation

Gold prices, reflected in XAU/USD, held steady at around $1,980.00, showing marginal movement despite the US Dollar’s early softness due to Asian equity gains. Investor caution prevailed ahead of the US Consumer Price Index (CPI) release, which reported in line with expectations – a monthly increase of 0.1% and an annual rate of 3.1%, slightly down from the previous 3.2%. Although the initial response saw XAU/USD touch $1,996.68 post-news, the Greenback recovered swiftly, leading to speculation on the Federal Reserve’s upcoming monetary policy announcement. As investors anticipate the Fed’s stance on rate adjustments, the steady inflation figures have partially tempered expectations of immediate rate cuts, contributing to short-term concerns and favoring the USD.

Chart XAU/USD by TradingView

On Tuesday, XAU/USD moved slightly lower. Currently, the price is moving between the lower and middle bands of the Bollinger Bands which creates a possibility that XAU/USD might move lower and try to reach our support levels. The Relative Strength Index (RSI) stands at 28, indicating bearish sentiment as it’s in the oversold area.

Resistance: $1,995, $2,016

Support: $1,973, $1,956

Economic Data

Stock futures showed minimal movement as Wall Street tracked the market’s resilience against impending inflation data. Modest increases in Dow Jones futures contrasted slight declines in S&P 500 and Nasdaq 100 futures, indicating a sustained end-of-year rally with indices securing multi-week gains. Investor sentiment faces a test with the upcoming release of the consumer price index (CPI) and the Federal Reserve’s final meeting, compounded by Oracle’s post-trading decrease. Additionally, recent dollar index growth, speculation on central bank actions, and stable currency pair movements contribute to the market’s delicate balance, with inflation and corporate earnings poised to challenge bullish sentiment.

Stock Market Updates

Stock futures exhibited minimal movement on Monday evening as Wall Street monitored the potential for the ongoing market surge to withstand upcoming inflation data. Futures linked to the Dow Jones Industrial Average marginally increased by 2 points, while S&P 500 and Nasdaq 100 futures experienced slight declines, each less than 0.1%. Despite these fractional changes, Monday’s modest stock market rise suggested that the end-of-year rally persisted, marking the S&P 500’s highest closure since March 2022 and the Dow’s strongest settlement since January 2022. Notably, all three major indices—the Dow, S&P 500, and Nasdaq Composite—maintained three-day winning streaks and had secured six consecutive weeks of gains.

However, investor sentiment faces a pivotal test on Tuesday as the release of November’s consumer price index (CPI) before the market opens and the commencement of the Federal Reserve’s final meeting of the year could sway market direction. Additionally, the market might react to tech giant Oracle’s after-hours trading decline of 7%, prompted by its fiscal second-quarter revenue missing Wall Street’s expectations. These developments indicate a delicate balance for the market, with inflation data and corporate earnings posing potential challenges to the prevailing bullish sentiment.

Data by Bloomberg

On Monday, the market saw an overall positive trend with all sectors showing gains except for Communication Services, which experienced a decline of 1.04%. Consumer Staples led the gains with a notable increase of 0.97%, followed closely by Industrials at 0.90%, Materials at 0.71%, and Financials at 0.68%. Sectors like Utilities, Health Care, and Information Technology also contributed to the uptrend, albeit to a slightly lesser extent, with gains ranging from 0.42% to 0.66%. However, the Real Estate and Consumer Discretionary sectors showed more modest increases at 0.32% and 0.12%, respectively. Energy mirrored Consumer Discretionary with a similar 0.12% gain.

Currency Market Updates

In recent market movements, the dollar index experienced a 0.13% surge post an encouraging payrolls report, prompting a sharp reversal in USD/JPY’s decline driven by exaggerated speculation on BoJ rate hikes and aggressive Fed rate cut predictions. Attention now pivots towards the upcoming U.S. CPI release and the Fed’s meeting conclusion later in the week. Treasury yields and the dollar, after robust Treasury auctions, have been on a decline.

The USD/JPY pair showcased a notable 0.9% ascent, nearly recovering from its substantial plunge in November, which saw a drastic 3.8% decline in a single day. Misinterpretation of BoJ Governor Kazuo Ueda’s remarks on potential rate hikes led to misconceived expectations, dispelled by reports suggesting the BoJ sees no rush in eliminating negative interest rates owing to insufficient evidence of sustained inflation stemming from wage growth. Market futures currently indicate a probability of a 10bp hike not until April, post-spring wage negotiations, and the disclosure of FY 2024-5 plans. The primary determinant for USD/JPY and other dollar pairings continues to be the trajectory of Fed policies. Anticipations have shifted post the jobs data, now leaning towards a first Fed hike in May rather than March, with four hikes projected by year-end, as opposed to the previously expected five.

Meanwhile, other currency pairs experienced relatively stable movements. EUR/USD remained stagnant, potentially influenced by concerns regarding China’s contracting economy, expectations of 130bp ECB cuts by 2024, and apprehensions about Ukraine’s financial capability in countering Russia’s invasion. Sterling demonstrated minimal change, relinquishing earlier gains, preceding notable U.S. event risks, including UK jobs data and the BoE and ECB meetings later in the week. The market favors the BoE’s initial cut in June, projecting a total of 75bp reductions next year. The Australian dollar declined by 0.15%, affected by surging Treasury yields, Chinese deflation trends, and plummeting energy prices, with USD/CNH reaching its highest level since November 20th.

Picks of the Day Analysis

EUR/USD (4 Hours)

EUR/USD Rebounds Modestly Amid Quiet Markets, Eyes ECB and US Economic Data

The EUR/USD pair saw a mild uptick, hovering around 1.0765 after hitting a low of 1.0741 in a subdued Monday session. The US Dollar Index experienced marginal gains, driven by rising Treasury yields as investors anticipate significant economic reports and central bank meetings. Eyes are set on the ZEW survey and ECB meeting in the Eurozone, with expectations leaning toward discussions on reinvestments from the PEPP program. Meanwhile, in the US, the focus shifts to the CPI figures and the FOMC meeting, where no significant surprises are expected but markets keenly await new projections. The USD remains in consolidation mode, awaiting fresh catalysts amid a restrained market environment.

Chart EUR/USD by TradingView

On Monday, the EUR/USD moved slightly higher and was able to reach the middle band of the Bollinger Bands. Currently, the price moving slightly below the middle band, suggesting a potential lower movement, potentially reaching the lower band. Notably, the Relative Strength Index (RSI) maintains its position at 43, signaling a bearish outlook for this currency pair.

Resistance: 1.0817, 1.0885

Support: 1.0747, 1.0664

XAU/USD (4 Hours)

XAU/USD Slide Amidst USD Strength and Fed’s Policy Conundrum

Spot Gold faced a continued decline on Monday, slipping below the $2,000 mark in response to the robust US Nonfarm Payrolls report. The surge in the US dollar, propelled not by confidence but by safety concerns, amplified worries about future monetary policy and its potential impact on the economy. The Federal Reserve’s cautious approach to interest rates, driven by the need for previous measures to take effect and concerns about the risks of higher rates, contrasts with a persistent aim to keep inflation in check. The tightening labor market, evident in the shrinking Unemployment Rate to 3.7% in November, signals the potential for further rate hikes, raising the specter of an impending recession. With the impending release of the November Consumer Price Index and the Fed’s policy decision and economic projections this week, answers regarding inflation and the Fed’s stance may dictate Gold’s trajectory amidst the complex economic landscape.

Chart XAU/USD by TradingView

On Monday, XAU/USD moved lower and was able to break below our support levels and create a push to the lower band of the Bollinger Bands. Currently, the price is moving slightly above the lower band which creates a possibility that XAU/USD might move higher and try to reach our resistance level. The Relative Strength Index (RSI) stands at 28, indicating bearish sentiment as it’s in the oversold area.

Resistance: $1,995, $2,016

Support: $1,973, $1,956

Economic Data

This week, the market’s primary focus revolves around the rate decisions of major central banks as they convene for their final meetings in 2023. Aside from these pivotal central bank decisions, the market is also keeping a close eye on the US consumer price index and producer price index, given that signs of inflation could influence the Fed’s policies during this period.

As always, traders are advised to exercise caution as we approach these upcoming market highlights for the week:

US consumer price index (12 December 2023)

Consumer prices in the US remained unchanged in October after a 0.4% increase in September.

Analysts expect no changes in the updated consumer price index for November, set to be released on 12 December.

UK monthly gross domestic product (13 December 2023)

The UK’s monthly gross domestic product (GDP) grew by 0.2% month-over-month in September 2023, following a 0.1% growth in August.

Updated figures are set to be released on 13 December, with analysts expecting the UK’s GDP to contract by 0.1%.

US producer price index (13 December 2023)

Producer prices in the US fell by 0.5% month-over-month in October 2023, marking the most significant decline since April 2020.

Analysts are forecasting an increase of 0.1% in the updated producer price index for the US, set to be released on 13 December.

The Fed’s interest rate decision (14 December 2023)

For the second consecutive time in November, the Federal Reserve maintained the federal funds rate at its 22-year high of 5.5%, a reflection of policymakers’ commitment to balancing the goal of reaching a 2% inflation target while avoiding excessive monetary tightening.

The next rate statement is slated for release on 14 December, with analysts expecting the rate to stay steady at 5.5%.

Swiss National Bank’s interest rate decision (14 December 2023)

The Swiss National Bank (SNB) unexpectedly opted to maintain its benchmark policy rate at 1.75% during its September 2023 meeting. This decision marks a temporary halt in the rate-hike campaign initiated in June of the previous year.

No change is expected in the SNB’s forthcoming rate statement, slated for release on 14 December.

Bank of England’s interest rate decision (14 December 2023)

During its November meeting, the Bank of England held firm on its benchmark interest rate, keeping it steady at a 15-year high of 5.25% for the second consecutive time. This decision comes as a response to recent indications of a slowdown in the UK’s economy coupled with the persistent challenge posed by elevated inflation.

The next rate statement is expected to be released on 14 December, with analysts expecting the rate to be maintained at 5.25%

European Central Bank’s interest rate decision (14 December 2023)

The European Central Bank (ECB) maintained its interest rates at 4.5% in October, signalling a notable departure from its 15-month trend of consecutive rate hikes. This decision underscores a shift towards a more cautious approach among policymakers, influenced by easing price pressures and apprehensions regarding an impending recession.

No change is expected in the ECB’s forthcoming rate statement, slated for release on 14 December.

US retail sales (14 December 2023)

After a 6-month stretch of growth, retail sales in the US declined by 0.1% month-over-month in October 2023.

Analysts expect another 0.1% decrease in the forthcoming retail sales data for the US, scheduled to be released on 14 December.

Stocks rebounded on Thursday, snapping a three-day decline for the Dow Jones Industrial Average and the S&P 500 ahead of the pivotal Friday jobs report. The S&P 500 surged by 0.80%, reaching 4,585.59, while the Dow added 62.95 points, marking a 0.17% increase to reach 36,117.38. The Nasdaq Composite soared by 1.37%, driven by strong performances from tech giants like Alphabet, Nvidia, and AMD. Despite this rebound, the Dow and S&P 500 were on track to conclude the week with slight losses, highlighting concerns about the market’s trajectory. Investors closely eyed employment data amidst mixed signals from the job market, while currency markets experienced significant volatility, particularly driven by the yen’s surge and its impact on major currency pairs like USD/JPY, EUR/USD, EUR/JPY, and others.

Stock Market Updates

Stocks experienced a rebound on Thursday, breaking a three-day decline for both the Dow Jones Industrial Average and the S&P 500 ahead of the pivotal Friday jobs report. The S&P 500 surged by 0.80%, hitting 4,585.59, while the Dow added 62.95 points, marking a 0.17% increase to reach 36,117.38. Notably, the Nasdaq Composite soared by 1.37% to 14,339.99, driven by strong performances from tech giants like Alphabet, whose launch of the Gemini AI model spurred a more than 5% surge. Nvidia and AMD also saw gains of over 2% and 9%, respectively. Despite this rebound, the Dow and S&P 500 were still on track to conclude the week with slight losses of around 0.4% and 0.2%, respectively, highlighting concerns about the market’s trajectory.

Investors were particularly focused on employment data, given mixed signals from the job market. While weekly jobless claims were below expectations and continuing jobless claims declined, indicating steady layoffs, private payroll data suggested fewer job additions than anticipated. Conflicting data, including a decrease in job openings in October, left the market in uncertainty ahead of Friday’s official jobs report, where economists projected the addition of 190,000 jobs in November. The Federal Reserve closely monitored these figures, hoping for signs of labor market moderation that would support its decision to pause interest rate hikes. Meanwhile, European markets slipped, reversing earlier gains, with the Stoxx 600 down 0.3%, largely led by losses in retail stocks, while Asia-Pacific markets faced a widespread slump as investors analyzed trade data from China and Australia.

Data by Bloomberg

On Thursday, the overall market saw a positive trend with a 0.80% increase across all sectors. Communication Services experienced a significant surge of 3.22%, followed by Information Technology with a 1.28% rise and Consumer Discretionary at 0.90%. Materials and Financials also showed positive growth, albeit more modestly, at 0.67% and 0.40%, respectively. Consumer Staples and Real Estate saw marginal gains of 0.32% and 0.09%, while Industrials had a slight increase of 0.06%. However, Health Care showed a minor decline of 0.08%. On the downside, Utilities and Energy experienced decreases of 0.24% and 0.61%, respectively, contributing to the mixed performance across the sectors.

Currency Market Updates

The currency market experienced significant volatility, primarily driven by the yen’s remarkable surge against major currencies like the dollar, euro, and sterling. The catalyst for this surge stemmed from BOJ Governor Kazuo Ueda’s comments, sparking speculation about a potential tightening of Japanese monetary policy. Ueda’s remarks strongly suggested an impending rate hike, creating a shift in sentiment and prompting a substantial unwinding of short yen positions. The USD/JPY pair faced a sharp decline, breaking key technical levels, notably the uptrend line from March and significant Fibonacci supports, signaling a potential erasure of half of the 2023 uptrend if it closes below 142.50, especially after the upcoming payrolls report.

Meanwhile, the fallout from the yen’s surge influenced other currency pairs. EUR/USD saw a modest 0.4% increase amidst choppy trading conditions, impacted by the yen’s movement and mixed U.S. data. The EUR/JPY pair, on the other hand, experienced a 2% decline, further fueled by speculative trading due to substantial euro longs and yen shorts based on ECB and BoJ policy divergence that is now converging rapidly. Additionally, the sterling rose slightly in the aftermath of the USD/JPY decline, with the market assessing the anticipated Fed rate cuts against the comparatively delayed and smaller BoE cuts suggested by futures. The risk-sensitive pound found support from U.S. equity gains, while the Australian dollar reversed earlier losses, rising approximately 0.9% amid slipping Treasury yields and climbing stock markets, showcasing its status as a risk proxy. Meanwhile, USD/CAD remained flat, mirroring the dollar’s performance within this fluctuating landscape.

Picks of the Day Analysis

EUR/USD (4 Hours)

EUR/USD Surges Amidst Dollar Weakness Ahead of Crucial US Employment Data

The EUR/USD witnessed a climb past 1.0800 from weekly lows near 1.0750 as the US Dollar weakened, driven by declining US yields. However, Germany’s unexpected drop in Industrial Production hints at a negative regional economic outlook. With the Eurozone’s forthcoming CPI likely to hold steady at 3.2%, attention shifts to the US employment data due Friday. Despite initial concerns about ECB and Fed policy divergence, the Dollar lost steam amidst improved risk sentiment. As the market anticipates a softer US labor market, expectations of a payroll increase to 180,000 in the forthcoming report linger, following a previous 150,000 figure.

Chart EUR/USD by TradingView

On Thursday, the EUR/USD moved slightly higher and was able to reach the middle band of the Bollinger Bands. Currently, the price moving slightly below the middle band, suggesting a potential lower movement, potentially reaching the lower band. Notably, the Relative Strength Index (RSI) maintains its position at 40, signaling a bearish outlook for this currency pair.

Resistance: 1.0825, 1.0920

Support: 1.0760, 1.0664

XAU/USD (4 Hours)

XAU/USD Sees Sideways Movement Amidst Resistance and Economic Indicators

The Gold spot market is currently experiencing a sideways trend without a definitive short-term direction, grappling with resistance at $2,040 while constrained by lower Treasury yields. Despite retracing from its all-time highs near $2,130, Gold’s negative momentum shows resilience. The recent drop in XAUD/USD inflicted damage but has stabilized, hinting at a potential consolidation phase. Amidst expectations of the Federal Reserve maintaining interest rates and potential rate cuts in 2024 following other central banks, Gold’s resurgence depends on a modest weakening of the US Dollar and continued subdued yields. With key economic data like the Nonfarm Payroll and the Consumer Price Index on the horizon, market focus remains pivotal on potential catalysts for Gold’s upward movement toward record highs.

Chart XAU/USD by TradingView

On Thursday, XAU/USD moved in consolidation waits for Friday’s US jobs report and created a narrow band of the Bollinger Bands. The current movement suggests that the market is still in wait-and-see mode for the non-farm data before goes in any direction. The Relative Strength Index (RSI) stands at 50, indicating a neutral sentiment for this pair.

Resistance: $2,041, $2,051

Support: $2,024, $2,016

Economic Data

U.S. stocks experienced a downturn amidst fluctuating trends, impacted by a drop in inflation and looming job market reports. The Dow Jones and S&P 500 faced consecutive losses, a rare occurrence since October, despite initial optimism from economic indicators. Investors remain watchful, especially regarding upcoming labor-related data releases, notably the November nonfarm payrolls report. European markets saw rebounds, but individual stock performances diverged. Currency markets witnessed the EUR/USD pair declining, potentially signaling a saturation point for rate cut expectations by the ECB and the Fed. Concerns about disinflationary trends arose due to underwhelming economic data. The Sterling approached critical levels against the dollar, influenced by declining yield spreads. Additionally, oil markets saw significant declines, reflecting worries about a global economic slowdown overshadowing OPEC+ supply cuts.

Stock Market Updates

U.S. stocks faced a downturn, grappling with fluctuating trends amid data revealing a drop in inflation and a significant jobs report on the horizon. The Dow Jones fell by 0.19%, closing at 36,054.43, marking the third consecutive losing day for both the Dow and the S&P 500, a rare occurrence since October. Initially buoyed by favorable economic indicators—such as declining labor costs and increased productivity—the market struggled to maintain its gains, fluctuating throughout the session. Investors remain vigilant as they assess various labor-related data releases, particularly scrutinizing the ADP report, which hinted at a potential easing in the job market, a crucial concern for the Federal Reserve.

However, uncertainties loom as investors eye upcoming data, particularly the eagerly awaited November nonfarm payrolls, wages, and unemployment rate figures scheduled for release on Friday. Despite the recent declines, questions emerge about whether this reflects a temporary pause in the late 2023 rally or signals a potential overextension of the market’s rapid ascent. Meanwhile, European markets rebounded, with the Stoxx 600 index rising by 0.6%, driven by surges in sectors like mining and autos, even as specific stocks like H&M experienced dips following a downgrade by Deutsche Bank analysts. In the Asia-Pacific region, markets rebounded after a previous sell-off, contributing to a positive turn in U.S. stocks during Wednesday’s morning trade following consecutive days of decline.

Amidst these fluctuations, individual stocks experienced divergent performances: Cloud company Box saw a more than 10% tumble due to third-quarter results falling below expectations, while homebuilder stock Toll Brothers gained nearly 2% after surpassing projections on both revenue and earnings. Additionally, telecom company Nokia faced a 6% drop following news of a partnership between U.S. giant AT&T and Ericsson for a next-generation wireless network rollout. In Europe, travel group Tui experienced a 14% increase in its stock value, backed by a significant rise in full-year profit and a promising forecast for operating profit growth in 2024.

Data by Bloomberg

On Wednesday, most sectors experienced a slight downturn with the overall market showing a decrease of 0.39%. Utilities saw a positive trend, gaining 1.38%, followed by Industrials at 0.47% and Health Care at a minimal 0.06% increase. Conversely, Energy faced the most significant decline, plummeting by 1.64%, while Information Technology also saw a considerable drop of 0.93%. Other sectors like Consumer Discretionary, Materials, Consumer Staples, Real Estate, Communication Services, and Financials also registered decreases ranging from -0.04% to -0.50%.

Currency Market Updates

In the recent currency market updates, the EUR/USD pair experienced a mild decline amidst a backdrop of various economic indicators and central bank sentiments. Despite a decrease in yield spreads between 2-year bunds and Treasury bonds, the pace of losses for the pair slowed, possibly indicating a saturation point for expectations of rate cuts by the ECB and the Fed in the coming year. The dollar faced challenges due to lower-than-anticipated ADP and unit labor cost figures, contributing to concerns about disinflationary trends, compounded by underwhelming JOLTS data. As market speculation already prices in future rate cuts by the Fed and the ECB, the focus has shifted to upcoming economic reports, particularly Thursday’s jobless claims, Friday’s employment report, and next Tuesday’s CPI figures, to gauge their impact on altering expectations for Fed rate cuts relative to the ECB’s stance.

EUR/USD’s decline to 1.07725 lows followed unexpected plunges in German industrial orders, reflecting a pattern of increasingly negative German economic data. While ECB representatives like Peter Kazimir echoed sentiments aligning with the view that rate hikes seem improbable, the possibility of swift rate cuts remains uncertain. Meanwhile, the USD/JPY pair saw a marginal increase, navigating a potential reversal from its 2023 uptrend, with key technical thresholds breached this week. Market anticipation for a downtrend revival, possibly leading to a move towards 144.58, relies heavily on forthcoming U.S. employment and inflation data reinforcing expectations of substantial Fed rate cuts.

Elsewhere, the Sterling approached a critical support level at 1.2569 against the dollar, influenced by declining Gilt-Treasury yield spreads. Market attention has turned to the upcoming BoE meeting, particularly monitoring the policy vote split, as expectations lean toward potential rate cuts as early as May, with projected cuts of 84 basis points by year-end, amid risks outlined in the BoE’s Financial Stability Report. Additionally, in the oil market, WTI experienced a significant decline of over 4%, while Brent hit its lowest point since June. These movements reflect growing concerns about a potential slowdown in the global economy, overshadowing the impact of OPEC+ supply cuts, as market sentiment increasingly focuses on demand-side risks.

Picks of the Day Analysis

EUR/USD (4 Hours)

EUR/USD Continues Decline Amidst Economic Indicators and Central Bank Signals

The EUR/USD pair sustained its sixth consecutive day of decline, plunging below 1.0770, marking its lowest point since mid-November. This downward trend stems from a weakened Euro juxtaposed against a robust US Dollar, intensifying pressure on the currency pair. Anticipation hovers around US job data, where the European Central Bank’s (ECB) projected rate cuts for 2024, ahead of the Federal Reserve (Fed), have notably impacted the EUR/USD dynamics. Despite subpar US data failing to prompt significant movement, the German 10-year bond yield’s drop, surpassing its US counterpart, indicates a complex market sentiment. Eurozone Retail Sales and Germany’s Factory Orders, showcasing mixed results, contribute to the growing expectation of ECB easing. Meanwhile, in the US, the ADP report hinted at a tightening labor market but failed to deter the resilient Dollar. With upcoming critical events such as Jobless Claims, Nonfarm Payrolls, the Consumer Price Index (CPI), and the impending FOMC decision, the market focus remains intensely fixated on the EUR/USD trajectory amidst these economic indicators and central bank signals.

Chart EUR/USD by TradingView

On Wednesday, the EUR/USD experienced a downward movement, creating a push to the lower band of the Bollinger Bands. Currently, the price moving slightly above the lower band, suggesting a potential upward movement, potentially reaching the middle band before goes back lower. Notably, the Relative Strength Index (RSI) maintains its position at 27, signaling a bearish outlook for this currency pair.

Resistance: 1.0825, 1.0920

Support: 1.0760, 1.0664

XAU/USD (4 Hours)

XAU/USD Consolidates Amid Economic Data and Dollar Strength

Gold (XAU/USD) experienced a notable shift as it recovered from recent lows near $2,008 following its pullback from record highs above $2,130. Currently consolidating around the $2,030 support level, the metal finds itself grappling with lower Treasury yields while facing a resilient US Dollar. Despite softer employment figures and declining 10-year Treasury yields, Gold’s upward momentum remains subdued. The metal retains a bullish long-term trend, yet it’s notably distant from its recent historic peaks, with its stability hinting at a complex interplay of economic data and currency strength. The looming release of further US employment data stands poised to influence Gold’s trajectory in the coming days.

Chart XAU/USD by TradingView

On Wednesday, XAU/USD moved slightly higher trying to reach the middle band of the Bollinger Bands. The current movement suggests a potential upward trend, possibly reaching the middle band. The Relative Strength Index (RSI) stands below 48, indicating a neutral sentiment for this pair.

Resistance: $2,031, $2,041

Support: $2,016, $2,006

Economic Data

Forex trading is often considered a matter of the head and not of the heart. Experienced traders commonly advise novices that success in this field requires being as cold and calculating as the market itself. This being the case, it might come as a surprise that there is a trading strategy where understanding feelings and emotions is actually beneficial. This strategy is known as sentiment analysis.

Sentiment analysis in Forex trading involves understanding the collective emotions of traders towards the market, specific currencies, or currency pairs. This strategy focuses on the overall mood of market participants, using it as a predictor of future market movements and providing an advantage in navigating the market.

You might wonder: How does this work, and why is it effective, considering traders are often advised to keep emotions out of their decisions? While it’s true that individual trading decisions should theoretically be devoid of emotion, the reality is that all human behaviour—including in the financial market—is heavily influenced by emotions and perceptions. In fact, the market can largely be said to reflect the combined thoughts, feelings, and opinions of all its participants. 

Using sentiment analysis, we aim to leverage on this, analysing how traders collectively feel about the financial landscape at any given time and capitalising on the likely behaviour that will follow.

If this approach intrigues you, here’s how you can start implementing sentiment analysis in your own trades:

Sources and Tools for Sentiment Analysis

Because of its unconventional nature, diving into sentiment analysis might be overwhelming if you’re utilising it for the first time. As such, let’s begin by learning where to get the information you will need to make this method work. 

In order to analyse the prevailing sentiment in any market, the first step is to acquire data that will help you do so. Far from being an obscure resource, such data is usually far more readily available than you might think: Sources such as social media platforms, financial news outlets, and economic indicators already offer a wealth of information on market sentiment. Yes, even a quick scroll through your Facebook or X feeds could provide you with a general idea of how the market is shaping up, especially if you are already following prominent traders and respected trading analysts whose opinions are likely to have an outsized impact on the markets.

If you’re interested in delving deeper into sentiment analysis, you can then proceed to explore more specialised tools, such as the Commitments of Traders (COT) report, which offers insights into market positions and categorises them based on different types of traders. These reports can be highly reliable as they can indicate a broader market sentiment beyond the confines of your social media bubble.

While these are fairly good starting points for traders of any level, you can also take a more in-depth approach by exploring other online options that cater to various levels of trading expertise, whether they are free platforms or subscription-based ones with more customisable features.

How to Interpret and Apply Sentiment Analysis in Trading

Great, you’ve acquired all the data you need. Now what?

This is where the fun begins! Sentiment analysis appeals to many because it offers the opportunity to experience that “gotcha” moment, where individuals feel like they’ve outsmarted the rest of the trading world. That’s because, for sentiment analysis to succeed, you indeed need to outsmart and outlast the market.

Having already gained information about how the market is feeling, the next step is to figure out how to respond to these conditions in order to maximise your profits. To do so, it is imperative that you learn the basics of interpreting sentiment indicators. For instance, while traditional analysis might suggest that a bullish market indicates a likely rise in a currency’s value, sentiment analysis might lead you to take a contrarian approach and go in the opposite direction, anticipating an impending market correction. This is how you achieve those “gotcha” moments – by discerning when and where you believe the market’s emotions are likely to backfire and anticipating them before they occur.

Of course, to utilise these tactics to their fullest potential, you should understand the fundamentals of how sentiment levels interact with the technical and fundamental analysis we’re more used to. There may be instances where sentiment analysis might tell you to go long, but technical indicators suggest that the market is overbought. In any case, always make sure to exercise caution and think about how other forms of analysis factor into what the market’s sentiments suggest.

Final Thoughts

As with any trading strategy, it’s important to remember that sentiment analysis is just one tool in the larger picture of forex trading, where a more balanced approach is often necessary. That being said, it can be both a fun and powerful tool to add to your arsenal, allowing you to go beyond the confines of strict technical or fundamental analysis. Through sentiment analysis, you can approach the market from a variety of angles, consequently finding new and unique ways to take on the complexities of the market. 

Ready to put your newfound knowledge to the test? Open your live account with VT Markets and start trading right away.

The stock market displayed a mixed session with varied movements across major indices: the Dow and S&P 500 edged slightly downward while the Nasdaq surged, propelled by tech stock performance. Factors including the U.S. 10-year Treasury yield dip below 4.2% and European market fluctuations played key roles. Amidst this, notable individual stock movements, like GitLab’s surge and the Russell 2000’s fall, highlighted nuanced market dynamics. Additionally, the currency market witnessed significant fluctuations, including the EUR/USD pair’s decline, highlighting the impact of central bank signals and global economic indicators on currency valuations.

Stock Market Updates

The stock market experienced a mixed day on Tuesday as major indices saw varied movements. The Dow Jones Industrial Average and the S&P 500 slid slightly, with the Dow dropping by 0.22% to close at 36,124.56 and the S&P 500 inching down by 0.06% to 4,567.18. However, the Nasdaq Composite managed to gain 0.31%, reaching 14,229.91, propelled by the outperformance of technology shares. GitLab surged by 11.5% after surpassing quarterly financial expectations and issuing robust guidance for the current quarter. Conversely, the Russell 2000 fell by more than 1% after a recent upward trend, raising hopes for a broader market rally and potential interest rate cuts from the Federal Reserve.

The market’s movements were influenced by various factors, including fluctuations in the U.S. 10-year Treasury yield, which fell below the significant 4.2% level, indicating a cooling labor market. This prompted a boost in technology shares, driving the Nasdaq into positive territory for the session. Meanwhile, European markets displayed mixed performance, with the Stoxx 600 index closing 0.4% higher, fueled by gains in auto stocks but offset by drops in mining stocks. Telecom stocks also saw notable shifts, with Ericsson climbing by 4.4% following a deal with AT&T, while Nokia faced an 8.4% plunge due to anticipated losses. The overall market sentiment seemed to hinge on prospects of potential rate cuts from the Federal Reserve, despite attempts by Fed Chair Jerome Powell to temper expectations for such measures. Additionally, gold prices reached record highs, touching $2,100, propelled by geopolitical uncertainty, a weaker U.S. dollar, and expectations of future interest rate cuts.

The market’s trajectory appeared influenced by nuanced shifts in various sectors and global events, with investors closely monitoring economic data, Federal Reserve signals, and geopolitical factors that could impact future market movements.

Data by Bloomberg

On Tuesday, the overall market saw a slight dip of 0.06%. However, specific sectors experienced varied movements. Information Technology surged by 0.82%, leading the gainers, followed by Consumer Discretionary (+0.32%) and Communication Services (+0.22%). Health Care (-0.17%), Real Estate (-0.45%), Financials (-0.51%), Consumer Staples (-0.79%), Utilities (-0.81%), Industrials (-0.86%), Materials (-1.37%), and Energy (-1.70%) all faced declines, with Energy and Materials showing the most significant drops among the sectors.

Currency Market Updates

The currency market witnessed significant fluctuations, particularly in the EUR/USD pair, which plummeted by 0.5%. This decline came after ECB’s Isabel Schnabel hinted at holding off on further rate hikes, coupled with improved U.S. November ISM services. The breach of support at 1.0800 led to a 0.4% rise in the dollar index, heavily influenced by EUR/USD, surpassing its downtrend line and settling around the 200-day moving average at 103.56. The market anticipates potential dollar gains depending on forthcoming economic indicators like Thursday’s jobless claims, Friday’s employment report, and next Tuesday’s CPI. This could mitigate the slide in Treasury yields, which have been factoring in five Fed cuts in 2024, possibly commencing as early as March post the Fed’s Dec. 12-13 meeting. Simultaneously, the ECB appears poised for two rate cuts by April and a substantial 142 basis points cut by the year-end.

Meanwhile, the pound experienced a 0.4% decline amidst a drop in 10-year gilts yields. Sterling’s support from the Bank of England signals a longer maintenance of higher rates compared to the Fed in the upcoming year. However, this also highlights the greater challenge the UK faces in curbing disinflation compared to the U.S. and the eurozone. In another development, the USD/JPY pair rose by 0.1% after initial fluctuations following mixed U.S. data. Yet, a bearish outlook persists due to a double-top at 32-year highs, hinting at potential medium-term weakness as the Fed’s tightening cycle reverses. The pair has approached major support levels at 146.64, and further decline might target significant supports at 144.58.

Additionally, the Australian dollar fell by 1% post the RBA meeting, perceived as less hawkish than anticipated. Moody’s downward revision of China’s outlook and a subsequent drop in the CSI300 added to the pressure, leading to the Aussie’s decline to its lowest point since February 2019. These combined factors contributed to the noteworthy movements across the currency market, reflecting the influence of global economic indicators and central bank policies on currency pairs’ valuations.

Picks of the Day Analysis

EUR/USD (4 Hours)

EUR/USD Continues Downward Trend Amidst ECB’s Caution and Fed’s Policy Signals

The EUR/USD sustained its decline below the 20-day SMA, influenced by a resurgent US Dollar and cautious remarks from ECB’s Isabel Schnabel regarding inflation. Speculation of a potential rate cut by the ECB heightened as Eurozone indicators revealed a decline in the Producer Price Index and stable one-year inflation expectations at 4.0%. Meanwhile, in the US, despite mixed data, a stronger Dollar persisted, driven by a perceived completion of the Fed’s tightening cycle amid slowing inflation and a more balanced labor market. Market focus now shifts to upcoming Eurozone retail sales data and the ADP Employment Report in the US as key indicators impacting the EUR/USD trend.

Chart EUR/USD by TradingView

On Tuesday, the EUR/USD experienced a downward movement, creating a push to the lower band of the Bollinger Bands. Currently, the price moving slightly above the lower band, suggesting a potential upward movement, potentially reaching the middle band before goes back lower. Notably, the Relative Strength Index (RSI) maintains its position at 27, signaling a bearish outlook for this currency pair.

Resistance: 1.0825, 1.0920

Support: 1.0760, 1.0664

XAU/USD (4 Hours)

XAU/USD Struggles as Dollar Gains Momentum Amid Mixed US Reports

Gold (XAU/USD) encountered a brief upswing in the Asian session before resuming its downward trajectory, signaling persistent bearish pressure. Despite varied US economic indicators and a drop in Treasury yields, the precious metal declined. The US reported a decrease in job openings alongside an ISM Services PMI surpassing expectations, fostering a balanced labor market impression. Despite this, the Greenback regained strength as Treasury yields fell, hitting multi-day highs. This Dollar momentum, coupled with declining yields, sustains a short-term bullish trend, painting a negative outlook for Gold amidst anticipation of key upcoming US data releases.

Chart XAU/USD by TradingView

On Tuesday, XAU/USD moved lower trying to reach the lower band of the Bollinger Bands. The current movement suggests a potential upward trend, possibly returning to the middle band. The Relative Strength Index (RSI) stands below 41, indicating a bearish yet neutral sentiment for this pair.

Resistance: $2,031, $2,049

Support: $2,006, $1,992

Economic Data

In the riveting world of finance, tales of triumph and turmoil are often immortalised on both the big and small screens. If you’ve been captivated by the dazzling lives of traders depicted in popular series like “Billions,” you might be intrigued to explore the real-life counterparts who have left an indelible mark on the financial landscape. 

Beyond the drama and glamour of television, these master traders have reshaped markets, defied the odds, and amassed fortunes that rival even the most vivid Hollywood imagination. 

1. George Soros: The Speculator Extraordinaire 

Estimated net worth: $8.5 billion (2022) 

Source of wealth: Hedge fund management 

Known as “The Man Who Broke the Bank of England,” George Soros is a name synonymous with audacious market speculation. In 1992, Soros made a bold bet against the British pound, earning him a staggering $1 billion in a single day. His ability to foresee market trends and capitalise on them has solidified his place as one of the greatest traders in history. 

2. Warren Buffett: The Oracle of Omaha 

Estimated net worth: $104.6 billion (2022) 

Source of wealth: Investing 

Warren Buffett, often hailed as the Oracle of Omaha, stands as a beacon of value investing. As the chairman and CEO of Berkshire Hathaway, Buffett’s patient and disciplined approach has seen him accumulate vast wealth over the decades. His sage advice and long-term investment strategy make him not just a trader but an iconic figure in the world of finance. 

3. Jesse Livermore: The Legendary Stock Trader 

Estimated net worth: $100 million (1929, adjusted for inflation) 

Source of wealth: Stock trading 

The early 20th century saw the rise of Jesse Livermore, a legendary figure in stock trading. Livermore’s career was marked by astounding successes and heartbreaking losses. His uncanny ability to read market trends earned him immense fortunes, but the volatile nature of trading eventually took its toll. Livermore’s legacy is one of both triumph and tragedy, showcasing the unpredictable nature of financial markets.

4. Ray Dalio: Mastering Macro Trends 

Estimated net worth: $16.9 billion (2022) 

Source of wealth: Hedge fund management 

Ray Dalio, the founder of Bridgewater Associates, has left an indelible mark on the hedge fund industry. Known for his expertise in macroeconomic trends, Dalio’s risk management strategies have propelled Bridgewater to become one of the largest and most successful hedge funds globally. His insights into the broader economic landscape have earned him a reputation as a thought leader in the financial world. 

5. Bernard Baruch: The Presidential Advisor and Financier 

Estimated net worth: $200 million (1955, adjusted for inflation) 

Source of wealth: Investing, stock trading 

In the early 20th century, Bernard Baruch, a distinguished financier and trusted advisor to multiple U.S. presidents, emerged as a significant figure whose impact resonated in both financial and political spheres. His accomplishments extended beyond successful trading ventures to encompass a pivotal role in shaping economic policy, particularly during times of crisis. Baruch’s unique position at the intersection of finance and politics highlighted the depth of his influence and the critical role he played in navigating the challenges of his era. 

6. William Delbert Gann: Pioneering Technical Analysis 

Estimated net worth: $100 million (1940, adjusted for inflation) 

Source of wealth: Trading commodities, stocks, and currencies 

William Delbert Gann’s contributions to technical analysis are nothing short of revolutionary. Gann’s innovative techniques, including Gann angles and the Square of Nine, have become cornerstones of market forecasting. His work laid the foundation for a more systematic approach to understanding and predicting market movements. 

7. Richard Dennis: The Turtle Trader Experiment 

Estimated net worth: $200 million (2014) 

Source of wealth: Trading commodities 

Richard Dennis, a commodities trader, gained fame for his unconventional approach to trading. The Turtle Traders experiment, where he trained novices to become successful traders using specific rules, demonstrated the potential of systematic trading strategies. Dennis’s experiment challenged conventional wisdom and showcased the power of disciplined trading. 

8. John Paulson: Profiting from the Subprime Mortgage Crisis 

Estimated net worth: $22 billion (2022) 

Source of wealth: Hedge fund management 

John Paulson gained widespread recognition for his successful bets against the subprime mortgage market in 2007. His prescient moves not only protected his hedge fund from the financial crisis but also earned it billions of dollars in profits. Paulson’s strategic thinking during turbulent times highlights the importance of adaptability in the ever-changing world of finance. 

9. Paul Tudor Jones: Predicting the 1987 Stock Market Crash 

Estimated net worth: $5.5 billion (2022) 

Source of wealth: Hedge fund management 

Paul Tudor Jones, a pioneer in global macro trading, made a name for himself by accurately predicting the 1987 stock market crash. The founder of Tudor Investment Corporation, Jones has consistently demonstrated his ability to navigate volatile markets and capitalise on major economic shifts. 

10. Jim Simons: The Quantitative Trading Maestro 

Estimated net worth: $23.5 billion (2022) 

Source of wealth: Quantitative investment management 

Jim Simons, a mathematician turned hedge fund manager, founded Renaissance Technologies and revolutionised quantitative trading. Simons’ success in developing complex algorithms and employing mathematical models has consistently delivered high returns, solidifying his place as a trailblazer in the world of quantitative finance. 

In the intricate tapestry of financial history, master traders have crafted tales of risk, reward, and resilience – stories that caution and inspire. Beyond the allure of screens, the real magic unfolds in the strategic minds of those who conquer markets. If you’re inspired to start your own trading journey and seek outstanding results, take the first step by opening a live account with VT Markets. Just as legendary traders paved their way, this platform can be your foundation for financial success. Open your account and begin crafting your narrative in the dynamic world of trading.