Gold & Silver Look Set to Drop!

GM. Currencies & Coffee rolling out – where we dive deep into forex waters and come up with pearls, not pebbles.

Here’s what we have covered today:

☕Latest Growth & Inflation Updates From Major Economies

☕ The Power of Confluence in Generating Profits

☕Gold & Silver Prices Look Set to Drop

🗞️Movers & Shakers🗞️

Let's dive into the key financial events from the past week and what's on the horizon for the upcoming week.

The Week That Was:

➡️ Middle East Tensions: The week started with tensions in the Middle East as Israel declared war on Hamas after a severe attack.

➡️ US Monetary Policy: The US bond market saw some fluctuations. Several members of the Federal Reserve hinted that they might keep interest rates steady for a while. This sentiment was further echoed in the FOMC minutes, emphasising a 'higher for longer' approach to interest rates.

➡️ US Economic Data: We saw mixed data from the US. While there was a strong job openings report, there was also a weaker-than-expected job growth report. Additionally, producer prices were higher than anticipated, but Wall Street seemed to focus more on the Federal Reserve's comments.

➡️ Global Markets: Gold prices saw an uptick, and oil prices had a roller-coaster week, starting strong but then declining. This decline was despite OPEC+ deciding not to change their oil output policy.

➡️ Central Banks: The Bank of England's deputy governor hinted at uncertainty regarding future interest rate hikes. Meanwhile, in China, consumer and producer price inflation remained weak, suggesting the possibility of more stimulus measures in the future.

➡️ Other Market Movements: The Reserve Bank of Australia (RBA) indicated that they are evaluating if further monetary tightening is needed to bolster the AUD. Additionally, there were rumours about the Bank of Japan intervening in the currency market, but no official confirmation was provided.

The Week Ahead:

➡️ U.K. Employment Data: On October 17 at 6:00 am GMT, the U.K. will release its latest employment figures. There's anticipation of more jobless claims and a potential slowdown in wage growth. This data could influence the British pound, especially if it indicates a weakening labour market.

➡️ Inflation Updates: Inflation data from various countries will be in focus. New Zealand is set to release its consumer prices on October 16 at 9:45 pm GMT. Canada will share its inflation data on October 17 at 12:30 pm GMT, and the U.K. and Eurozone will follow suit on October 18 at 6:00 am GMT and 9:00 am GMT, respectively. Japan will release its data on October 19 at 11:30 pm GMT. These releases can significantly impact their respective currencies, especially if the data deviates from expectations.

➡️ U.S. Economic Indicators: On October 17 at 12:30 pm GMT, the U.S. will release its retail sales data, which could influence the US dollar. This will be followed by industrial production data at 1:15 pm GMT. Additionally, several Federal Reserve members will speak throughout the week, which could provide insights into the Fed's current thinking.

➡️ China's Economic Data: On October 18 at 2:00 am GMT, China will release a slew of economic data, including GDP, fixed asset investment, and retail sales. Given China's influence on global markets, any surprises here could have ripple effects on various currencies.

The Power of Confluence in Generating Profits

In the dynamic world of trading, achieving consistent success relies on more than just luck. It demands a systematic approach that incorporates multiple sources of information and confirmation before executing a trade. This is where the concept of confluence comes into play. Imagine confluence as the alignment of the stars in the trading universe – a harmonious synchronization of technical analysis factors that signals a high-probability trade.

1. Understanding Confluence:
Confluence, in the context of trading, refers to the powerful principle of seeking multiple technical analysis factors that align before entering a trade. It's essentially a risk management technique that reduces reliance on a single indicator or signal. By requiring several elements to fall into place, confluence significantly increases the reliability of your trading decisions.

2. The Power of Multiple Confirmations:
Picture this: you're planning a road trip, and multiple weather forecasts predict rain. Would you still confidently embark on your journey, or would you reconsider your plans? Similarly, in trading, multiple confirmations provide that extra layer of confidence. They decrease the risk of false signals and enhance the likelihood of a successful trade. Instead of relying solely on a single indicator, you're looking for a chorus of indicators singing in harmony.

3. Building Your Confluence Checklist:
You need a checklist of trusted technical analysis tools and indicators to implement confluence effectively. These can include support and resistance levels, moving averages, trendlines, oscillators, and more. These tools should be thoroughly understood, and their significance in your trading strategy should be clear. These tools are your navigation instruments, guiding you through the trading waters.

4. Patiently Wait for Alignment:
One of the greatest challenges in trading is patience. It's tempting to jump into a trade at the slightest hint of a signal. However, the power of confluence lies in patience. Wait for several elements on your checklist to align before entering a position. For instance, if you're considering a long trade, look for multiple technical factors supporting a bullish scenario. This can include a rising trendline, a bounce from a key support level, and a bullish divergence in your chosen oscillator.

5. The Risk-Reward Balance:
Trading isn't just about winning; it's also about managing risk effectively. Confluence increases your win rate and allows for better risk-reward ratios. You can set wider stop-loss orders with multiple confirmations, protecting your capital more effectively. Simultaneously, you can target more substantial profits due to the higher probability of success. It's a delicate balance, and confluence helps you strike it more effectively.

Incorporate the power of confluence into your trading strategy. You'll enhance your trading accuracy and bolster your risk management techniques by patiently waiting for multiple technical confirmations to align. Remember, trading is a journey, and the more tools you have at your disposal, the better equipped you are to navigate the markets successfully.

SIP,  LAUGH,  TRADE 😁

📈LATTE LINEUP📈

-XAGUSD- (Silver)

HTF (Daily): The analysis from last week remains relevant as we await confirmation from Silver regarding the retest of the previous support.

We are looking for the current price level to act as resistance on the Higher Time Frame (HTF). The price is currently resting on the 61.80% Fibonacci level, a strong confluence area that could potentially continue the bearish trend. To confirm the sellers' return, we should wait for a bearish rejection, indecision, or engulfing candle and then search for a suitable entry on the Lower Time Frame (LTF).

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LTF (1-HR): As always, once our HTF confirmations align, we want to see the selling pressure of the HTF translate to a shift in market structure on the LTF from higher highs and higher lows to lower lows and lower highs. We can execute a sell position once we have a break and retest of an LTF support confirmed by bearish rejection or engulfing candles. I will look to place my stop loss above the previous high and target the previous HTF low.