Rising yields push the stocks lower

Risk aversion continues as yields pushed the US stock indices lower. The biggest casualty was the tech-heavy Nasdaq which suffers the most from the rising cost of financing. Markets are worried that the fed is behind the curve and acting too slow. This creates inflation fears and pressures the stock markets. Therefore today’s main risk events are the release of US inflation data (CPI and PPI) are highly significant and could swing the dollar and the stock indices substantially. My trade ideas for today are GBPAUD long and EURAUD short. I will also provide updates on EURGBP and EURCHF. And I’ll keep you posted via Telegraph when I see new opportunities emerging. By reading further, you agree with our disclaimer at the end of this report and acknowledge that we do not provide investment advice.To get more news about tiomarkets trading, you can visit wikifx.com official website.

The way I have structured my analysis is that I will post trade ideas when I see them but when now apparent trade ideas stand out at the time of writing the analysis I will provide you with analysis and key price levels on markets that are worth putting on a watchlist. As soon as something catches my eye I will update you on our Telegram channel.

EURAUD has been rallying lately but yesterday the red team started to get active below the 1.4690 support level. The level also coincides with a downward pointing trend channel top which adds to its significance. Sellers pushed the pair below a rising trendline so this could turn into a shorting opportunity. I’m interested in shorting this market below the 1.4690 resistance with targets at 1.4570 (T1) and 1.4476 (T2). Alternative scenario: EURAUD rallies above 1.4690 and moves to 1.4760.

EURGBP missed my T1 level by 0.07%. In general, it makes sense to take profits somewhere ‘close enough’ to a target level as the R/R gets worse the closer the price gets to a target level. Now the pair has moved to the level I gave you in the alternative scenario. The pair is now trading in a tight range between 0.8342 and 0.8360. Measured moves point to 0.8325 on the downside and 0.8375 on the upside. These are likely target if there’s a decisive breakout in either direction. EUR is weakish against the major competitors so the support could break first.

EURCHF is trading right below the 1.0131 support which has been a key support level lately. I said yesterday (here) that as the pair once again failed to stay above the 1.0194 key resistance the probabilities for the market breaking the 1.0131and heading to my T1 1.0067 have increased. It’s now interesting to see if there will be follow-through selling in this market or whether the bulls will once more try to push the price higher. The pair stays bearish below the 1.0194 level. The alternative scenario is that EURCHF rallies above the 1.0194 resistance and moves to 1.0280.

Macro Drivers for the USD As the most followed, invested and traded markets for risky assets are priced in the USD it is helpful to understand what macroeconomic factors impact the other side of the equation, the USD. Whether we are trading EURUSD, XAUUSD or US equity CFDs the factors impacting the dollar, the nominator in the equation, have a significant role in the formation of all medium to long-term price action. The following table summarises the most important fundamentals.