Gold Analysis H4 chart

 

Gold near term resistance 3368.00. If price break above this level we may see another uncertainty as happened in 16 June.

Bullish Max Butterfly Harmonics Pattern

 A bullish Max Butterfly pattern emerged on GBPUSD 1hr chart

 

 

Ichimoku Kinko Hyo trade on Japanese cross pairs

 We have very strong bullish trend on several japanese cross currency pairs.

Have a look at below charts attached :

CHFJPY Weekly Chart. This pair looks trending very high

 

EURJPY daily chart.

 USDJPY H4 chart. It looks price might get back to the high of 148.00.

 GBPJPY Weekly chart. Future cloud change color signalling a bullish run.

 

 

Scalping the Gold

1 min chart scalping.

 

Impact Of U.S-5 Year Treasury on Forex

 

The U.S. 5-year Treasury note has a significant impact on currency trading (forex) because it influences investor sentiment, interest rate expectations, and capital flows. Here’s how:

1. Interest Rate Expectations & Yield Movements

• The 5-year Treasury yield reflects market expectations about future Federal Reserve interest rate policies.

• If yields rise, it signals higher expected interest rates, making the U.S. dollar (USD) more attractive as investors seek higher returns.

• Conversely, falling yields suggest dovish Fed policies, weakening the USD.

2. Risk Sentiment & Safe-Haven Flows

• U.S. Treasuries are considered safe-haven assets.

• In times of economic uncertainty, demand for 5-year Treasuries rises, strengthening the USD as investors flee riskier assets.

• If yields drop due to safe-haven buying, it can signal risk-off sentiment, weakening riskier currencies (e.g., AUD, EM FX).

3. Yield Spreads Between Countries

• Forex traders compare 5-year U.S. yields vs. other countries’ bonds (e.g., German Bunds, Japanese JGBs).

• A widening yield spread in favor of the U.S. boosts USD demand as investors chase higher returns.

• A narrowing spread can weaken the USD if foreign bonds become more attractive.

4. Inflation & Economic Growth Signals

• The 5-year Treasury yield reacts to inflation expectations (e.g., breakeven rates from TIPS).

• Rising yields due to inflation fears may strengthen the USD if the Fed is expected to hike rates.

• Falling yields due to recession risks can weaken the USD if rate cuts are anticipated.

5. Fed Policy & Forward Guidance

• The Fed monitors the 5-year yield curve (e.g., vs. 2-year or 10-year) for economic signals.

• An inverted yield curve (5-year below 2-year) may signal a coming recession, weakening the USD.

• A steepening curve (5-year rising faster than 10-year) suggests growth optimism, supporting the USD.

Trading Implications:

• USD Strengthens when 5-year yields rise (higher rate expectations).

• USD Weakens when 5-year yields fall (dovish Fed outlook).

• Carry trades (borrowing in low-yield currencies to buy USD assets) depend on yield differentials.

Key Data to Watch:

• 5-year Treasury auctions (strong demand = lower yields, weak demand = higher yields).

• Fed speeches & economic data (jobs, CPI) that influence rate expectations.

• Yield spreads (e.g., U.S. 5-year vs. Germany’s 5-year Bund).

Conclusion

The 5-year Treasury note is a critical driver of forex markets because it reflects interest rate expectations, risk sentiment, and economic trends. Traders closely monitor its yield movements to gauge USD strength or weakness against other currencies.

XAUUSD Soar after Israel confirmed strike on Iran

 News broke out that Israel strike on Iran. XAUUSD price soar.

 

Futures Trading vs. CFD Trading: A Comprehensive Comparison

 

Trading Venue and Regulation

• Futures: Traded on regulated exchanges (e.g., CME, ICE) with oversight by bodies like the CFTC. Standardized contracts ensure transparency and lower counterparty risk via clearinghouses.

• CFDs: Over-the-counter (OTC) products offered by brokers, leading to variable regulation. Higher counterparty risk as brokers act as the counterparty; banned in some jurisdictions (e.g., the U.S.).

Contract Structure

• Futures: Fixed expiration dates requiring roll-over or closure. Possible physical settlement (e.g., commodities) but often cash-settled.

• CFDs: No expiration; positions can be held indefinitely but incur overnight financing charges. Always cash-settled.

Costs and Fees

• Futures: Commissions, exchange fees, and potential roll-over costs. Lower spreads but higher upfront margin.

• CFDs: Costs embedded in spreads, overnight fees, and possible inactivity charges. No commissions, but wider spreads common.

Leverage and Accessibility

• Futures: Leverage determined by exchanges, often lower (e.g., 5:1 to 20:1). Higher capital requirements due to standardized contract sizes.

• CFDs: Higher leverage (up to 30:1 or more in some regions). Smaller contract sizes allow retail participation with less capital.

Market Access

• Futures: Limited to exchange-listed assets (indices, commodities, currencies).

• CFDs: Broader access, including stocks, ETFs, cryptocurrencies, and niche markets, depending on the broker.

Risk Profile

• Futures: Lower counterparty risk due to clearinghouses. Potential for physical delivery if held to expiry.

• CFDs: Counterparty risk tied to broker solvency. No delivery risk but exposure to overnight funding costs and gap risks.

   

  7. Trading Flexibility

     • Futures: Set trading hours aligned with exchanges. Short selling permitted without borrowing.

     • CFDs: Often 24/5 trading for forex and indices. Easier short selling with no borrowing requirements.

  8. Tax and Purpose

     • Futures: Favorable tax treatment in some regions (e.g., 60/40 rule in the U.S.). Used for hedging by institutions.

     • CFDs: Typically taxed as income. Primarily for speculation by retail traders.

  Pros and Cons Summary

• Futures Pros: Regulated, transparent, lower counterparty risk, tax benefits.

• Futures Cons: Higher capital, fixed expiries, less flexible for small traders.

• CFD Pros: Flexible leverage, no expiry, diverse markets, lower entry barriers.

• CFD Cons: Higher counterparty risk, overnight costs, regulatory restrictions.

Ideal Use Cases

• Futures: Suitable for institutions and traders hedging or speculating with larger capital.

• CFDs: Attractive to retail traders seeking flexibility and lower capital requirements for short-term speculation.

This comparison highlights key distinctions to guide traders in choosing the instrument aligned with their strategy, risk tolerance, and capital capacity.