Open Account Trading Carries Risk

European shares have been under pressure as western countries are considering tougher sanctions against the Russian Federation. According to Reuters Germany’s defence minister said the European Union must discuss banning imports of Russian gas. This would most likely send natural gas prices yet higher while forcing energy rationing in Europe. In today’s report, I cover DAX, DJ and Bitcoin but stay tuned to the TIOmarkets Telegram channel (Link) where I will post new trade ideas. By reading further, you agree with our disclaimer at the end of this report and acknowledge that we do not provide investment advice.

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.

I tend to include Target 1 (T1) and Target 2 (T2) levels (or ranges) so that you have an idea of how far the market would probably move if price action supports my trade ideas. The target one is a high probability target while the next target is further away and therefore there’s a greater risk that the market doesn’t reach the level.  While I don’t provide investment advice my analysis helps you in your own market analysis and then you can decide how to trade the markets. If you need help more help with your trading join me at the next live analysis webinar here: www.TIOmarkets.com/webinars I will show you live how to analyse the markets and identify trading opportunities.

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DAX 8h chart 04 04

DAX is starting to look weak after rallying for a month. The index is creating lower highs in the 4h chart and is breaking supports. If 14323 is broken decisively, my T1 is at 14210 and T2 at 14120. Alternatively, if 14568 resistance is cleared DAX is likely to move to 14732. Get my market analysis daily to your inbox! Register here for FREE! 

DJ 2h chart 04 04

DJ is a bit stronger and the market could break the 34900 resistance before the support at 34553 is taken broken. If the weakness in Dax continues it will probably push DJ towards 34553 but as long as the level is not broken there’s a good chance that 34900 is penetrated either today or tomorrow. On a decisive break above this level, my T1 for DJ is 35050 and T2 is 35220. Alternative scenario: The 34553 support is violated and DJ moves to 34400 or so.

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2022 04 06 14 49 26

BTCUSD traders are trying to decide whether the price is going to stay above 45848. This has been a significant resistance level in the past but has been now penetrated so in theory, the market should be in a breakout mode. This draws our attention to the 44233 low which is in a key role and a break below it should take this market at least to the 42844 – 43400 range. The declining trend channel low and a recent resistance level coincide at 43400 making this a likely target for those that look to trade the short side. The nearest key resistances for Bitcoin be at 47450 and 48238.

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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.

The Federal Reserve The Fed is expected to continue rate hikes after a 0.25% hike in its March meeting. The current Dot Plot suggests as many as seven rate hikes this year and puts the median rate for 2022 at 1.9%. Dot Plot is the FOMC participants’ assessment of appropriate monetary policy.
Stimulus The Fed is looking to scale down its bond-buying program (QE) but has signalled that it be careful with tightening due to the war in Europe.
Yields The US 10-year treasury yield has risen to 2.187% as investors sell the bonds and adjust to the expected rate hikes.
Employment The March non-farm payrolls increased by 431K while the analyst consensus had predicted 492K new jobs. The unemployment rate dropped to 3.6% and average hourly earnings were in line with expectations (0.4% vs. 0.4% expected).
Inflation The annual headline inflation reading for January came in at 7.5% (7% prior). This was the highest CPI print in 40 years. The core CPI (all items less food and energy) was confirmed at 6.0% (5.5% previous).

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 The Next Main Risk Events

  • GBP – BOE Gov Bailey Speaks
  • CAD – BOC Business Outlook Survey
  • AUD – Cash Rate
  • AUD – RBA Rate Statement
  • USD – ISM Services PMI
  • USD – FOMC Member Brainard Speaks

For more information and details see the TIOmarkets economic calendar here

Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

Open a VIP Black account now at TIOmarkets.com. We want you to be able to exploit trading opportunities in financial markets with 0 commission and tight spreads. Take advantage of the best trading account in the industry: TIOmarkets VIP Black. For more details on this truly exceptional offering see here. For more analysis and commentary, visit our YouTube channel where you can find market commentary videos to support your learning and growth as a trader. 

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DISCLAIMER TIOmarkets offers exclusively consultancy-free service. The views expressed in this blog are our opinions only and made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with any legal requirements for financial analyzes and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval. FX and CFDs are leveraged products. They are not suitable for every investor, as they carry a high risk of losing your capital. Please ensure you fully understand the risks involved. All the prices in this report are CFD prices based on price charts provided by TIOmarkets unless otherwise stated. 

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