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Analysis Fundamental Analysis

US Dollar Extends Consolidation as Labor Market Data Looms

US Dollar Extends Consolidation as Labor Market Data Looms US Dollar Trades Steady Ahead of Key Economic Data The US Dollar (USD) remains relatively stable on Tuesday, showing slight gains against most major currencies as the trading week kicks off following the Labor Day holiday in the United States. The Greenback is experiencing a mild uptick against almost every major currency on the quote board, except the Japanese Yen (JPY). This cautious optimism comes as US markets reopen and traders brace for the release of significant economic data later in the day. Market Reactions and the Global Economic Landscape The global economic landscape has been shaken by recent developments, particularly in Europe. Markets were rattled by news that German automotive giant Volkswagen is considering closing factories in its home country for the first time ever. This potential move would be a significant blow to both the German government and the broader European economy. The uncertainty surrounding this decision adds pressure to the Euro, indirectly benefiting the US Dollar as traders seek safer assets. Key Economic Data on the Horizon Tuesday’s economic calendar is packed with crucial data releases, with the most anticipated being the Institute for Supply Management (ISM) Manufacturing survey for August. This report will provide insights into the health of the US manufacturing sector, which has been under scrutiny as global economic conditions remain uncertain. ISM Manufacturing Data Expectations The ISM Manufacturing survey is expected to show a slight improvement in the headline Purchasing Managers Index (PMI), which is projected to rise to 47.5 from the previous month’s reading of 46.8. While this still indicates contraction in the manufacturing sector, any positive movement could provide some support for the US Dollar. Additionally, the Prices Paid component of the survey is expected to edge down slightly to 52.5 from 52.9, reflecting ongoing inflationary pressures. The New Orders Index and the Employment Index, which stood at 47.4 and 43.4 respectively in July, will also be closely watched for any signs of recovery or further deterioration. S&P Global Final Manufacturing PMI In addition to the ISM data, S&P Global is set to release its final Manufacturing PMI for August at 13:45 GMT. The preliminary reading stood at 48, indicating contraction, and it is not expected to be revised. This figure will provide further context for the overall health of the US manufacturing sector and could influence market sentiment depending on the outcome. TIPP Economic Optimism Survey Another key report on the agenda is the TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism survey for September. The previous reading of 44.5 suggested a relatively pessimistic outlook among consumers and businesses. However, the upcoming survey is expected to show a slight improvement, with a reading of 46.2. This survey will offer additional insights into how the public perceives the current economic environment and prospects. Market Movers and Reactions As the US Dollar consolidates, global markets are displaying mixed reactions. Equities are under pressure across the board, with minor losses reported for all major European indices. US futures are also on the back foot, reflecting the cautious mood ahead of the upcoming data releases. The market’s focus is squarely on the potential implications of this data for future monetary policy decisions by the Federal Reserve. Fed Rate Cut Speculation and the CME FedWatch Tool The CME FedWatch Tool provides valuable insights into market expectations for the Federal Reserve’s next move. Currently, there is a 69.0% chance of a 25 basis points (bps) interest rate cut in September, compared to a 31.0% chance of a more aggressive 50 bps cut. If the Fed opts for a 25 bps cut in September, there is a 49.9% probability of another 25 bps cut in November. Additionally, the market sees a 41.5% chance that rates will be 75 bps lower by November (a combination of a 25 bps and a 50 bps cut) and an 8.6% probability of a full 100 bps reduction. These expectations are crucial as they guide market participants in their trading decisions. The US 10-year benchmark rate, which opened at 3.93%, has dipped slightly to 3.90% as traders digest the latest developments and position themselves ahead of the Fed’s next move. Technical Analysis: Key Resistance Levels for the US Dollar From a technical perspective, the US Dollar Index (DXY) is approaching a significant resistance level that could pave the way for a breakout if breached. This resistance level is closely watched by traders as a potential trigger for further gains in the US Dollar. The outcome of the upcoming economic data, particularly the ISM Manufacturing survey, could be the catalyst that determines whether the DXY can overcome this resistance or if it will remain range-bound. Balancing Data and Market Sentiment In summary, the US Dollar is trading with a slight positive bias as markets gear up for a series of important economic data releases. The stability of the Greenback reflects cautious optimism as traders await insights into the US manufacturing sector and broader economic sentiment. However, the looming possibility of an interest rate cut by the Federal Reserve continues to cast a shadow over the currency’s outlook. Market participants will be closely monitoring the data and the Fed’s subsequent decisions to gauge the future trajectory of the US Dollar in the weeks ahead.

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Analysis Currencies News Technical Analysis

EUR/GBP Advances Toward 0.8450, But Gains May Be Capped by Dovish ECB Stance

EUR/GBP Advances Toward 0.8450, But Gains May Be Capped by Dovish ECB Stance EUR/GBP Gains Ground Amid Dovish ECB Expectations The EUR/GBP currency pair has been advancing, with gains extending into the second consecutive day. As of Tuesday’s European session, the pair is trading around 0.8430, reflecting positive momentum for the Euro against the British Pound. However, the potential for further gains appears to be limited, primarily due to a dovish outlook surrounding the European Central Bank’s (ECB) upcoming policy decision in September. Dovish Signals from the ECB and Potential Rate Cut The speculation that the ECB might cut interest rates at its next meeting is putting pressure on the Euro. This anticipated rate cut, which would be the second since the ECB began shifting toward policy normalization in June, is rooted in the central bank’s ongoing efforts to manage inflation and support economic recovery. ECB policymakers remain optimistic that inflation will gradually return to the bank’s 2% target by 2025. François Villeroy de Galhau, a member of the ECB Governing Council, recently added weight to this speculation. Speaking on Friday, Villeroy de Galhau suggested that there are “good reasons” for the ECB to consider cutting its key interest rates in September. According to Bloomberg, he emphasized that it would be both fair and prudent to make this decision at the upcoming meeting on September 12. This dovish stance underscores the ECB’s focus on ensuring that inflation remains under control while fostering economic stability in the Eurozone. EUR/GBP Daily Price Chart Source: TradingView, prepared by Richard Miles UK Economic Indicators and Their Impact on EUR/GBP In contrast to the dovish sentiment surrounding the ECB, recent economic data from the United Kingdom (UK) has been somewhat more supportive of the British Pound. The British Retail Consortium (BRC) reported a 0.8% year-on-year increase in Like-for-Like Retail Sales for August, up from a 0.3% rise in July. This marks the fastest growth in five months and indicates a strengthening retail sector, which could bolster the Pound. Moreover, the S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) held steady at 52.5 for August, consistent with preliminary estimates. This stability in the manufacturing sector, combined with the retail sales data, suggests that the UK economy is showing resilience, despite global economic uncertainties. Market Expectations and BoE’s Policy Outlook As traders look ahead, the focus is shifting to the Bank of England (BoE) and its upcoming policy decisions. Unlike the ECB, the BoE is not expected to cut interest rates at its September meeting. Market participants are largely pricing in no change in the BoE’s policy in the near term, with the possibility of a 25 basis points (bps) interest rate cut in November standing at 87.2%. This contrast in central bank policies between the ECB and the BoE is likely to limit the upside potential for the EUR/GBP pair. The BoE’s approach reflects the ongoing challenges the UK economy faces, including inflationary pressures and the need to balance economic growth with financial stability. Traders will be closely watching any developments or statements from BoE officials, particularly Deputy Governor Sarah Breeden. Breeden is set to moderate a panel on supervisory cooperation at a joint conference hosted by the ECB and the European Banking Authority on Tuesday. Any insights or comments from this event could influence market expectations and the trajectory of the EUR/GBP pair. Technical Analysis: Key Levels to Watch for EUR/GBP From a technical standpoint, the EUR/GBP pair is facing significant resistance as it approaches the 0.8450 level. While the pair has managed to recover from recent lows, the upside remains capped due to the overarching dovish sentiment surrounding the ECB. The pair may struggle to break through this resistance, particularly if the market continues to anticipate a rate cut from the ECB in September. On the downside, support is likely to be found around the 0.8400 level. A break below this support could open the door for further declines, particularly if UK economic data continues to outperform expectations or if the BoE maintains a more hawkish stance compared to the ECB. Balancing Central Bank Divergence and Economic Data In summary, the EUR/GBP pair has shown some strength, but its upside potential is limited by the dovish outlook for the ECB. As traders anticipate a possible rate cut from the ECB in September, the Euro remains under pressure, capping gains against the British Pound. Meanwhile, positive economic indicators from the UK and the BoE’s relatively stable policy outlook are providing support for the Pound, creating a complex landscape for the EUR/GBP pair. Traders will need to closely monitor central bank developments and economic data releases to navigate the potential risks and opportunities in this currency pair.

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Analysis Commodities Commodity News Gold Market Forecasts News

Gold Price Extends Its Decline as Traders Brace for US PMI Data

Gold Price Extends Its Decline as Traders Brace for US PMI Data Gold Price Decline Amid Stronger US Dollar Gold prices have continued their downward trend, marking the third consecutive day of losses during Tuesday’s early European session. The precious metal’s decline is primarily driven by the strength of the US Dollar (USD) and rising US Treasury bond yields, which have exerted selling pressure on Gold. As the USD strengthens, it often diminishes the appeal of Gold as an alternative asset, especially since Gold is priced in USD. Despite these headwinds, some factors could limit further losses for Gold. The growing anticipation that the US Federal Reserve (Fed) will cut interest rates in September is one such factor. Lower interest rates typically reduce the opportunity cost of holding non-yielding assets like Gold, making it a more attractive option for investors. Geopolitical Risks and Safe-Haven Demand Another critical factor supporting Gold prices, even as they face selling pressure, is the ongoing geopolitical tensions, particularly in the Middle East. The region has been fraught with conflicts, and recent events have heightened concerns. For instance, protests erupted across Israel on Monday over the government’s failure to secure a ceasefire-for-hostages deal with Hamas. The situation escalated further with the killing of six hostages in Gaza, whose bodies were retrieved by Israeli soldiers over the weekend. These geopolitical uncertainties often boost demand for safe-haven assets like Gold. Investors typically flock to Gold in times of crisis, seeking refuge from the volatility and uncertainty that can impact other financial markets. As such, while Gold faces downward pressure from a stronger USD and higher bond yields, the potential for geopolitical events to drive safe-haven demand remains a key factor that could support its price. XAU/USD Daily Price Chart Source: TradingView, prepared by Richard Miles Upcoming US Economic Data and Market Sentiment Looking ahead, the market’s attention is firmly focused on the release of key US economic data, which could provide fresh impetus for Gold prices. The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers Index (PMI) for August, set to be published on Tuesday, is one such critical data point. The PMI is expected to show a slight improvement, with forecasts suggesting an increase to 47.5 from 46.8 in July. Meanwhile, the Services PMI is estimated to decline slightly to 51.1 in August from 51.4 previously. In addition to the PMI data, the highlight of the week will be the US Nonfarm Payrolls (NFP) report for August. The report is expected to show the addition of 163,000 jobs, with the unemployment rate forecasted to tick lower to 4.2%. The NFP data is particularly significant as it could influence the Federal Reserve’s decision-making process regarding interest rate cuts. A strong jobs report could reduce the likelihood of aggressive rate cuts, which might weigh on Gold prices. Conversely, weaker-than-expected data could bolster expectations for a rate cut, potentially providing support for Gold. Market Expectations for Fed Rate Cuts According to the CME FedWatch tool, the market is pricing in a nearly 69% chance of a 25 basis points (bps) rate cut by the Federal Reserve in September. There is also a 31% probability of a more substantial 50 bps rate reduction. The prospect of rate cuts has been a significant driver of market sentiment in recent weeks, and any shift in expectations could have a pronounced impact on Gold prices. Lower interest rates generally support Gold prices by reducing the opportunity cost of holding the metal, as Gold does not yield interest or dividends. Therefore, any indication that the Fed is leaning toward rate cuts could provide a bullish impetus for Gold, despite the current selling pressure. Technical Analysis: Gold Price Maintains a Positive Long-Term Outlook From a technical perspective, Gold’s longer-term outlook remains constructive, even as it faces short-term selling pressure. The price of Gold remains well above the key 100-day Exponential Moving Average (EMA), which currently serves as a significant support level. The 14-day Relative Strength Index (RSI) also reinforces the positive outlook, standing above the midline at around 55.70. This suggests that the upward momentum in Gold is more likely to resume than to reverse. Key resistance levels for XAU/USD are identified in the $2,530-$2,540 zone, which aligns with the upper boundary of a five-month-old ascending channel and the all-time high. A decisive break above this level could see Gold rally towards the $2,600 psychological level. On the downside, the low of August 22 at $2,470 acts as initial support. A break below this level could drag Gold prices further south, with the next support levels at $2,432 (the low of August 15) and $2,372, where the 100-day EMA lies. Balancing Risks and Opportunities In summary, Gold prices are under pressure due to a stronger USD and rising bond yields, but several factors could limit further losses. The anticipation of Fed rate cuts and ongoing geopolitical risks provide potential support for Gold. Meanwhile, upcoming US economic data, particularly the ISM PMI and NFP report, will be critical in shaping market sentiment and determining the near-term direction of Gold prices. Despite the current selling pressure, the longer-term technical outlook for Gold remains positive, with key support and resistance levels likely to play a crucial role in the days ahead.

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Analysis Crypto Ethereum Technical Analysis

August Crypto Market Recap: Ethereum Leads as DEX Volume Declines, CEXs See Growth

August Crypto Market Recap: Ethereum Leads as DEX Volume Declines, CEXs See Growth In August, the volume of cryptocurrencies traded on decentralized exchanges (DEXs) saw a notable decline, highlighting the shifting dynamics within the cryptocurrency market. According to data from DeFi Llama, DEX platforms collectively processed over $181 billion worth of cryptocurrency in August, a significant drop from the $198 billion recorded in July. This reduction marks a continuing trend, as the monthly trading volume on DEXs peaked back in March when these platforms handled over $260 billion, coinciding with a broader market surge that lifted most cryptocurrencies. Ethereum Dominates DEX Trading Ethereum continued to dominate the DEX landscape, maintaining its position as the most active blockchain for decentralized trading. In August, DEX platforms on the Ethereum network processed over $52.5 billion worth of cryptocurrency transactions, solidifying Ethereum’s role as the backbone of decentralized finance (DeFi). The network’s robust infrastructure and large user base contribute to its enduring leadership in the space. Following Ethereum, Solana, and Arbitrum were the next most active chains for DEX trading. Solana-based DEX platforms handled $42.5 billion in transactions during the month, while Arbitrum, a Layer 2 scaling solution for Ethereum, processed $22.3 billion. These figures underscore the growing diversification of activity across various blockchain networks, as developers and users explore alternatives to Ethereum due to its high gas fees and scalability challenges. Tron Emerges as a Rising Star One of the standout performers in August was Tron, which saw significant growth in its DEX activity. Tron’s ascent was largely fueled by the launch of the SunPump meme coin generator, a platform that has captured the attention of the crypto community. SUN, the largest DEX platform within the Tron ecosystem, handled $3.2 billion worth of tokens in August, marking a substantial improvement in Tron’s position within the DeFi landscape. Uniswap Leads the DEX Pack Among the individual DEX platforms, Uniswap once again led the market in August. Uniswap’s dominance can be attributed to its pioneering role in the DeFi movement and its continuous innovation, which keeps it at the forefront of decentralized trading. Following Uniswap, Solana’s Raydium and Binance Smart Chain’s PancakeSwap were the next most active DEXs, each serving as crucial hubs for liquidity and trading within their respective ecosystems. However, Solana’s DEX volume saw a noticeable decline, largely due to the poor performance of meme coins within its ecosystem. Notable examples include Bonk, Book of Meme, and Dogwifhat, which have all experienced significant price drops. Bonk, once a popular meme coin, has fallen by over 64% from its peak earlier this year. Meanwhile, Dogwifhat and Book of Meme have each declined by more than 70% from their year-to-date highs. These losses have dampened trading activity on Solana’s DEX platforms, reflecting the volatility and speculative nature of meme coins. Source: Dexs(defillama.com), prepared by Richard Miles Centralized Exchanges Outperform DEXs While DEXs faced a challenging month, centralized exchanges (CEXs) saw better performance in August. Data indicates that CEXs processed $1.2 trillion worth of cryptocurrency transactions during the month, up from $1.1 trillion in July. Similar to DEXs, the trading volume on CEXs also peaked in March, reaching $2.48 trillion as Bitcoin and other altcoins experienced significant price gains. Binance maintained its position as the leading CEX, processing over $448 billion in transactions in August. Other major players in the centralized exchange space include Bybit, Crypto.com, Huobi, and Coinbase, each contributing to the overall increase in trading volume. Futures Market Decline Reflects Broader Market Sentiment The futures market also reflected the broader difficulties faced by the cryptocurrency market in August. The open interest in cryptocurrency futures, particularly for Bitcoin, saw a decline throughout the month. Bitcoin’s futures open interest stood at $30 billion on August 31, down from a monthly high of $37 billion. This decrease in futures interest is indicative of a cautious market sentiment, as traders and investors grapple with uncertainty in the face of macroeconomic factors and fluctuating asset prices. August proved to be a challenging month for cryptocurrencies across the board. The market was initially jolted on August 5 when fears of the unwinding of the Japanese yen carry trade led to a broad selloff in risk assets, including cryptocurrencies. While most digital assets recovered somewhat from their monthly lows, they remained significantly below their peak levels for the year. Bitcoin, for instance, is still trading 18% below its year-to-date high, while Ethereum has declined by nearly 40% from its March highs. In conclusion, August highlighted the volatility and shifting dynamics within the cryptocurrency market. While Ethereum continues to lead the DEX space, other networks like Solana and Tron are making their mark. However, the decline in DEX volume and the challenges faced by certain segments of the market, such as meme coins, underscore the complexities of navigating the evolving landscape of digital assets.

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Analysis Commodities Silver Technical Analysis

Silver Price Forecast: XAG/USD Slips to $28.50 Amid Diminishing Hawkish Sentiment from the Fed

Silver Price Forecast: XAG/USD Slips to $28.50 Amid Diminishing Hawkish Sentiment from the Fed Silver prices (XAG/USD) have experienced a downturn, falling to around $28.50 per troy ounce in the early hours of Monday. This marks the second consecutive session of losses for the precious metal, driven largely by shifting market sentiment following recent economic data from the United States. The decline in silver prices can be attributed to a combination of factors, including diminishing expectations of aggressive monetary easing by the Federal Reserve and rising geopolitical tensions. Impact of US PCE Index Data on Market Sentiment The recent release of the US Personal Consumption Expenditures (PCE) Index data for July has had a significant impact on market expectations regarding the Federal Reserve’s future monetary policy moves. The PCE Index, a key indicator of inflation that the Fed closely monitors showed signs of moderating inflationary pressures, leading traders to reassess their expectations for the Fed’s rate-cutting trajectory. Before the release of the PCE data, there was a strong belief in the market that the Fed might adopt an aggressive stance in reducing interest rates to combat slowing economic growth. However, the July PCE data has prompted a reevaluation of these expectations. With inflation showing signs of cooling, the urgency for the Fed to implement deep rate cuts has lessened. This shift in sentiment has put downward pressure on silver prices, as the metal is often seen as a hedge against inflation and a beneficiary of a looser monetary policy. XAG/USD Daily Price Chart Source: TradingView, prepared by Richard Miles Fed’s Monetary Policy Outlook The Federal Reserve’s approach to interest rates remains a central focus for market participants. According to the CME FedWatch Tool, there is now a 70% probability that the Fed will opt for at least a 25 basis point rate cut at its September meeting. This probability has been adjusted downward from earlier expectations of more aggressive cuts, reflecting the influence of the recent PCE data. Adding to the uncertainty, comments from Federal Reserve officials have also played a role in shaping market sentiment. Raphael Bostic, the President of the Federal Reserve Bank of Atlanta and a noted hawk within the Federal Open Market Committee (FOMC), recently remarked that it might be “time to move” on rate cuts due to cooling inflation and a higher-than-expected unemployment rate. Bostic’s comments, while not overtly dovish, have been interpreted as neutral by market analysts, suggesting that the Fed may take a more measured approach to rate cuts in the coming months. A custom AI model analyzing Fed officials’ speeches rated Bostic’s remarks as neutral, scoring them at 5.6 on a dovish-to-hawkish scale of 0 to 10. This further underscores the growing sentiment that the Fed may not rush to implement aggressive rate cuts, thereby reducing the support for silver prices that could come from a more accommodative monetary policy. Geopolitical Tensions and Safe-Haven Demand While economic data and Fed policy expectations are key drivers of silver prices, geopolitical factors also play a crucial role in shaping the market’s direction. Recently, silver has come under additional downward pressure due to escalating tensions in Israel. On Sunday, widespread protests erupted across the country, driven by frustration over the government’s handling of the ongoing conflict and the failure to secure a ceasefire agreement. The protests, which saw an estimated 500,000 people take to the streets in cities such as Jerusalem and Tel Aviv, have added to the geopolitical uncertainty in the region. Protesters are demanding stronger action from Prime Minister Benjamin Netanyahu to secure the release of the remaining 101 hostages, a situation that has further strained the government’s credibility. Typically, silver is viewed as a safe-haven asset, which tends to gain value during periods of geopolitical instability. However, in this instance, the impact of the protests on silver prices has been mixed. While the protests have contributed to an increase in market uncertainty, the prevailing sentiment driven by US economic data and Fed policy expectations has overshadowed the safe-haven appeal of silver. Focus on Upcoming US Employment Data Looking ahead, market participants are likely to focus on the upcoming US employment figures, including the Nonfarm Payrolls (NFP) report for August. This data will be critical in shaping the market’s expectations for the Fed’s next moves. A strong NFP report could reinforce the view that the US economy is resilient, potentially reducing the likelihood of aggressive rate cuts and further weighing on silver prices. Conversely, a weaker-than-expected NFP report could reignite concerns about economic growth, potentially boosting silver’s appeal as a safe haven. The silver market is currently navigating a complex landscape of economic data, central bank policy expectations, and geopolitical tensions. The recent drop in silver prices to around $28.50 per troy ounce reflects the market’s reaction to moderating inflationary pressures in the US, which have diminished the odds of aggressive rate cuts by the Federal Reserve. At the same time, geopolitical tensions in Israel have added another layer of uncertainty, although their impact on silver prices has been tempered by the prevailing macroeconomic outlook. As traders await further clarity from upcoming US employment data, silver prices are likely to remain sensitive to developments on both the economic and geopolitical fronts. In this environment, maintaining a balanced perspective and staying informed about the latest market trends will be key for those navigating the silver market.

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Free Trading Guides

5 Things I Wish I Knew When I Started Trading Forex

5 Things I Wish I Knew When I Started Trading Forex When I first ventured into the world of forex trading, I was full of ambition and optimism. I believed that with the right strategy, I could quickly turn my investment into substantial profits. However, the reality of forex trading is far more complex than I initially understood. Here are five crucial lessons I wish I had known when I started trading forex. 1) Forex Is Not a Get-Rich-Quick Scheme The Illusion of Easy Money One of the biggest misconceptions about forex trading is that it offers a shortcut to wealth. Many newcomers, myself included, are drawn in by stories of traders making huge profits in a short time. This leads to unrealistic expectations and, often, disappointment. The Reality Check In reality, forex trading is a long-term game that requires patience, discipline, and continuous learning. The profits you can earn are more a reflection of your risk management and consistency than the “perfect” strategy. Successful traders understand that building wealth through trading takes time, and they focus on steady growth rather than chasing quick wins. 2) Leverage Is a Double-Edged Sword The Temptation of High Leverage Leverage allows traders to control larger positions with a smaller amount of capital, which can amplify profits. However, it can also magnify losses just as quickly. When I first started, I used high leverage thinking it would accelerate my profits, but instead, it led to significant losses. The Importance of Caution Understanding how to use leverage wisely is crucial. Excessive leverage can turn a winning strategy into a losing one. It’s essential to manage leverage carefully, using no more than 10x effective leverage to balance the potential for profit with the risk of significant loss. 3) The Market Doesn’t Care About Your Strategy The Harsh Truth When I began trading, I was confident in the strategy I had developed. It worked well in backtests, and I was sure it would bring me consistent profits. However, I quickly learned that the market is unpredictable, and no strategy is foolproof. Adapting to Market Conditions The market is constantly changing, influenced by countless factors that are often beyond our control. A strategy that works well in one market environment may fail in another. It’s important to stay flexible and be willing to adapt your approach as market conditions evolve. 4) Psychology Plays a Huge Role in Trading The Emotional Rollercoaster Trading forex can be an emotional experience. The highs of winning trades and the lows of losing ones can lead to impulsive decisions that deviate from your trading plan. I underestimated the impact of emotions on my trading performance. Developing Emotional Discipline Successful trading requires emotional discipline. It’s crucial to stick to your trading plan and avoid making decisions based on fear or greed. Managing your emotions and maintaining a clear, rational mindset is just as important as having a solid trading strategy. 5) Retail Sentiment Can Be a Powerful Tool Understanding Market Sentiment One of the most valuable lessons I’ve learned is the importance of understanding market sentiment. Retail sentiment, in particular, can provide insights into the behavior of other traders and help inform your trading decisions. Using Sentiment to Your Advantage Tools like the Client Sentiment can be incredibly useful for gauging market sentiment. By taking a contrarian approach—trading against the majority sentiment—you can often find opportunities that others might overlook. Incorporating sentiment analysis into your trading strategy can significantly improve your chances of success. Learn Before You Leap If I could go back in time, these are the five lessons I would impart to my younger self before diving into forex trading. Forex trading is a challenging yet rewarding journey, but it requires more than just a good strategy—it demands a deep understanding of the market, emotional discipline, and a willingness to learn from mistakes. For those new to forex trading, take the time to educate yourself thoroughly. Start with the basics, stay informed about market developments, and remember that success in forex trading is a marathon, not a sprint.

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Analysis Currencies EUR/USD Market Forecasts

EUR/USD Price Forecast: Constructive Outlook Remains Intact Above 1.1150

EUR/USD Price Forecast: Constructive Outlook Remains Intact Above 1.1150 Overview of Current Market Conditions As of Monday’s early European session, the EUR/USD pair is showing mild gains, trading around 1.1055. This comes after a three-day losing streak, marking a moment of stabilization for the currency pair. The recent price action is largely influenced by the dovish stance of the US Federal Reserve (Fed), which has put downward pressure on the US Dollar (Greenback) and provided some support for the Euro. Federal Reserve’s Dovish Stance Supports EUR/USD The financial markets are currently pricing in a nearly 70% probability of a 25 basis points (bps) rate cut by the Fed in September. In contrast, the chance of a more aggressive 50 bps reduction is estimated at 30%, according to the CME FedWatch tool. The focus now shifts to the upcoming US employment data, scheduled for release on Friday, which will provide further insights into the Fed’s potential monetary policy moves in September. Technical Analysis: Bullish Outlook Maintained From a technical perspective, the EUR/USD pair maintains a bullish outlook as it holds above the key 100-day Exponential Moving Average (EMA) on the daily chart. This level has proven to be a strong support, preventing the pair from extending its recent losses. Relative Strength Index (RSI) Signals Neutral Momentum However, it’s worth noting that the 14-day Relative Strength Index (RSI) is hovering around the midline, indicating neutral momentum. This suggests that while the overall trend remains positive, the pair might experience some consolidation before any significant upward movement. EUR/USD Daily Price Chart Source: TradingView, prepared by Richard Miles Key Levels to Watch Upside Potential: Resistance Levels The immediate resistance for EUR/USD is at 1.1185, which corresponds to the high of August 28. A decisive break above this level could open the door for further gains. The next hurdle is seen at the upper boundary of the Bollinger Band, located around 1.1230. If the pair manages to break through this level, it could rally towards 1.1275, the high recorded on July 18. Downside Risks: Support Levels On the downside, the crucial support level is at the psychological mark of 1.1000. A breach of this level could trigger a deeper correction, with the next support at 1.0950, the low observed on August 15. If selling pressure intensifies, traders should watch for additional support near the 100-day EMA at 1.0893. Beyond this, the lower limit of the Bollinger Band at 1.0863 serves as the final downside filter. Market Sentiment and Future Outlook Impact of US Employment Data on EUR/USD The upcoming US employment data will be critical in shaping the near-term outlook for EUR/USD. Strong employment figures could bolster the case for a less aggressive rate cut by the Fed, potentially putting pressure on the Euro. Conversely, weaker-than-expected data could reinforce expectations of a 25 bps rate cut, or even a 50 bps reduction, thereby supporting the EUR/USD pair. Long-Term Perspective In the longer term, the EUR/USD pair’s ability to maintain its position above the 100-day EMA will be crucial in sustaining the bullish outlook. A sustained break above the resistance levels mentioned earlier could signal the start of a new upward trend, potentially targeting the 1.1300 level and beyond. However, if the pair fails to hold above the 1.1000 support, it may face increased selling pressure, leading to a deeper correction. Constructive Outlook with Caution In summary, the EUR/USD pair is currently trading with a constructive outlook, supported by the Fed’s dovish stance and its position above key technical levels. While the overall trend remains positive, the neutral momentum indicated by the RSI suggests that further consolidation is possible in the near term. Traders should closely monitor the key resistance and support levels, as well as the upcoming US employment data, to gauge the pair’s next move.

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