Fundamental Analysis before Trading.

[GreenApple]

Renewed strength in the dollar - which tends to be boosted by trade war tensions as it is considered a safe haven asset - is pushing the offshore Chinese yuan towards 7 per dollar and has seen the euro slip towards $1.13.

[GreenApple]

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

[GreenApple]

The Fed is widely anticipated to raise interest rates in December, with traders’ expectations at 75.8 percent, compared to 71.1 percent a day earlier, according to CME Group’s FedWatch tool.

[GreenApple]

“We’re wary of selling the dollar too soon, because the Fed is still hiking rates into a tightening labor market and trade tensions haven’t gone away,” said Kit Juckes, chief FX Strategist at Society Generals.

[GreenApple]

The greenback had fallen broadly following U.S. midterm elections on Tuesday on expectations that the outcome would make further fiscal stimulus measures unlikely.

[GreenApple]

Gold is hovering near the middle of its consolidation range in the meantime, with the $1225 level acting as a price magnet, while copper continued its bearish drift after the failed break-out attempt of its broad correction pattern. As usual we expect a very active and hectic post-Fed period, and day-traders should be aware of the stop runs and false moves that often happen in the volatile environment.

[GreenApple]

Commodities are trading with a bearish bias ahead of the Fed, with especially crude oil looking weak again, and yesterday’s huge US inventory build just made matters worse for energy bulls. The WTI contract is still holding up above the $60 level, but the spike below that support, that we speculated on during the weekend is still very likely before a meaningful rally, despite the deeply oversold momentum readings.

[GreenApple]

The swift rise in yields contributed to the decline in stocks, but now investors seemingly got used to the new reality of rates, and the broader bearish trend will likely resume on another catalyst.

[GreenApple]

Equities are also having a slow session so far, and while that’s not a surprise on a Fed-day it also solidifies the recent bounce, especially as Treasuries are signaling a slightly hawkish Fed statement, with especially the short end of the yield curve pushing higher.

[GreenApple]

Rallies still should be treated as selling opportunities, especially as the relatively weaker markets in Europe and Asia are still not showing signs of strong recovery, even as the major US indices are once again outperforming their global peers.