US10YR, Gold, USDJPY On February 21th | Summary and Q&A

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February 21, 2019
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US10YR, Gold, USDJPY On February 21th

TL;DR

The Fed's recent beige book showed confusion and hesitation, leading to a potential rise in yields and a correction in the gold market. The USD/JPY may experience further downside.

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Questions & Answers

Q: What impact might rising yields have on the market and commodity markets?

Rising yields could put pressure on the overall market and commodity markets, potentially leading to a market correction and affecting commodity prices.

Q: Should traders be cautious about investing in gold at this point?

Yes, traders should exercise caution in the gold market as there could be a potential shakeout and downside correction. The recent euphoria among gold bugs may lead to a market shakeout before further advances.

Q: What are some potential shorting opportunities in the gold market?

Given the achieved targets and the potential for a market shakeout, traders may consider looking for shorting opportunities in the gold market. However, it's essential to carefully analyze market conditions and risk factors before initiating any trades.

Q: How might the USD/JPY currency pair be affected in the upcoming days and weeks?

The USD/JPY currency pair, being a risk-off/risk-on currency, may experience further downside in the coming days and weeks. Levels of 109.50 and even 108.50 are viable targets, but it's crucial to consider risk management and closely monitor the market.

Summary & Key Takeaways

  • The Fed's beige book indicated confusion and hesitation regarding rates, potentially leading to a rise in yields to 2.85-2.90, impacting the overall market and commodity sectors.

  • The gold market achieved its target of $1,340 but experienced a correction afterwards, signaling the possibility of a downside correction and caution for gold traders.

  • The USD/JPY, a risk-off/risk-on currency, still has more downside potential, with possible levels of 109.50 and even 108.50 in the near future.

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