A1 Trading Company

September 28, 2023

Yields Hold Steady After GDP

Frank Cabibi

GDP numbers came in lower than expected in the US, marking the third straight drop in economic output. This is usually good news for the stock market indices and gold, however, bond yields continue to hold up above 5.1%. Here are some potential trade setups for both dollar and index longs depending on how the market performs the rest of the week:

EdgeFinder Analysis

AU is sitting at a -10 strong bearish score on the EdgeFinder. In the historically bearish month of September, the pair has well underperformed as risk-off sentiment looms. Recent lower GDP in the US has caught investors' eyes as this could mean a lesser anticipation of Fed interference.

However, yields are still higher and have maintained above 5% for some time. Higher yields is going to continue to put pressure on the risk appetite for now, and AU may continue to form lower lows going into the end of this week.

NAS100 is resting on support as we start the morning off in the NY session. This looks like a strong level of support that price will have to break under if sentiment is still strongly bearish. Otherwise, it could serve as a potential long opportunity post GDP optimism from a lower than expected number.

However, if price were to break this level, we may be looking at another low towards the $14,200s. It's still not a very bullish market right now, and lower lows seem more likely than not. But in case of a switch in sentiment, this index could show resilience at the falling trend line.

EU is another strong bearish reading on our scanner. At -12, the pair is the most bearish. With COT moving starchily against the euro and into the dollar, price doesn't look bullish any time soon. With retail majority long, we can anticipate further bearishness from the pair.

Although on support, optimism from GDP may not be strong enough going forward. The trend and seasonality indicators suggest more downside for the next few months as well. Overall, the USD is sweeping the euro in every sense.

Retail Spotlight

Retail is majority risk-on as they are shorting the USD and buying AUD, NZD and GBP. The indices are mostly mixed with a slight lean to the bearish side.

Smart Money Spotlight

It's important to look at all the data the Smart Money Tracker provides because what looked like a bullish bias on gold this week was actually negative. The table shows how many gold positions were open long to short. The bottom chart shows the number of long contracts between gold and USD added. Because the dollar saw an incredible rise in long contracts, it took the reins against the metal and pushed price lower.

Fundamental Spotlight

Although outpacing the rest of the world, the US is still seeing declines in GDP overall. Seeing this is optimistic for risk-on traders who are looking for less Fed hikes in the future. Outside of inflation itself, the Fed is looking for lower GDP and labor numbers. So, a lower GDP is good for NAS100, but it's unclear if this will be enough to boost morale.

A1 Edgefinder

All-In-One Fundamental Dashboard!
Simplify your fundamental analysis with our all-in-one fundamental dashboard! 
Discount code: READER

Learn more

Hotter CPI Shakes Markets

Yesterday's CPI numbers in the US caused considerable doubt in the expectations of a June rate cut. This morning's PPI came in lower than expected. But, it might not be enough to convince investors of a summer rate cut. EdgeFinder Analysis EURUSD is a -8 now on the EdgeFinder indicating dollar strength after the higher […]

Read More
Key Inflation Data Weighs on Investor Sentiment

Wednesday's inflation report in the US will be very pivotal in how USD-related assets will react for the next month. Higher CPI has investors worried of the Fed who still looks to cut rates at some point this year, but the inflationary trend could determine when these rate cuts come. EdgeFinder Analysis We have been […]

Read More
PMI Pushes Higher into Expansion

This morning's ISM Manufacturing PMI data came in higher than expected this month at 50.3. Here is what investors might be thinking in regards of the latest numbers, and why this could be bearish for the dollar. EdgeFinder Analysis USOil's score drops at the start of this month as the seasonality on the 10-year average […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram