Forex trading on the US indices, central banks rethinking interest rates [Video]
|Now that things are settling down, the world has come to the conclusion that the central banks may not be lowering Interest Rates as much as we would have hoped.
This has caused a weakening in the stock markets and we can see from the US indices that we are in decline.
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If we look specifically at the S&P 500, the trend lines are obvious and the logical trade is “Short” or “Sell.”
But, wait for a bounce off the upper trend line and some confirmation from your favourite technical indicators.
You may ask, “Are we in a Bear Market?”
Technically, no as price action is well above the 200-day simple moving average.
In fact, if we look at the DJIA, we see where the 50-day crossed the 200-day and we call this a “Golden Cross” and look at what happened.
If we look at the USD pairs like USDCHF, we can see a big jump in the strength of the Greenback based on higher-than-expected inflation figures.
These are NOT conducive to any Interest Rate reduction so, the USD gets stronger and the equities continue to fall.
We promised to keep an eye on a possible reversal in Silver and Gold.
If you were paying attention you may have taken a short position based on a reversal of the stochastic oscillator and MACD on the one-hour chart on XAGUSD.
And, exited here.
Take a look at higher timeframes, however, as we may need to wait for more short opportunities.
That’s all for now.
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