All eyes will be on the Jackson Hole in Wyoming this week, where the annual Jackson Hole Economic Symposium will be held by the Federal Reserve Bank of Kansas City. This years symposium will take place from 23rd until the 25th of August and the topic for the upcoming event will be “Changing Market Structure and Implications for Monetary Policy”. About Jackson Hole Economic Symposium The key feature of the meeting is the discussion that takes place between the participants.
Because of the high-profile participants and the topics that are discussed in the event, there is a considerable interest in the symposium, however, to help foster the open discussion that is critical to the event, the attendance is very limited. The event receives a large number of requests from media agencies worldwide, however, the press presence is also limited to a group that is selected to provide transparency to the symposium. Importance of the event The symposium is closely followed by financial markets participants around the world and over the past decade it has attracted more attention, this is mainly because what has happened in the past.
Some of the biggest monetary policies were initially revealed at the event, although they were not formally announced. During the event, any unexpected comment from any participants can influence the global financial markets. Here are some notable moments from the Jackson Hole Symposium: 2005 – Raghuram Rajan (then the professor at the University of Chicago and former governor of Reserve Bank of India) warned about risks that the financial system had absorbed throughout the years.
Three years later, the US subprime mortgage crisis erupted into the global financial crisis. 2012 – Michael Woodford (macroeconomist and monetary theorist, Columbia University) presented where he said that Fed’s stance on keeping its main interest rate near zero until a certain time would reflect pessimism about the speed of the economy’s recovery. Later that year, the Fed announced it would keep rates near zero until unemployment fell to 6.50% and inflation did not climb above 2.50%. 2014 – Mario Draghi (ECB president) hinted that the ECB was edging closer to embarking on its QE path. During the event, Mario Draghi said that ECB could use ‘all the available instruments’.
His announcement came just two months after ECB introduced negative deposit rates in the Eurozone, the financial markets rallied during his speech at the Jackson Hole. The symposium is a must watch financial market event and it is worth keeping an eye on the discussions and speeches during the event as we may see statements from some of the most influential people from around the world. This year, Federal Reserve Chairman Jerome Powell will headline the event in Jackson Hole with a speech about monetary policy in a changing economy, according to the Fed Board so it’s time to mark your calendars!
Klāvs Valters Market Analyst
By
Adam Taylor
CFTe. Director, Go Markets London.
The information provided is of general nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information provided, you should consider whether the information is suitable for you and your personal circumstances and if necessary, seek appropriate professional advice. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Past performance is not an indication of future performance. Go Markets Pty Ltd, ABN 85 081 864 039, AFSL 254963 is a CFD issuer, and trading carries significant risks and is not suitable for everyone. You do not own or have any interest in the rights to the underlying assets. You should consider the appropriateness by reviewing our TMD, FSG, PDS and other CFD legal documents to ensure you understand the risks before you invest in CFDs. These documents are available here.
For over 110 years, the Federal Reserve (the Fed) has operated at a deliberate distance from the White House and Congress.
It is the only federal agency that doesn’t report to any single branch of government in the way most agencies do, and can implement policy without waiting for political approval.
These policies include interest rate decisions, adjusting the money supply, emergency lending to banks, capital reserve requirements for banks, and determining which financial institutions require heightened oversight.
The Fed can act independently on all these critical economic decisions and more.
But why does the US government enable this? And why is it that nearly every major economy has adopted a similar model for their central bank?
The foundation of Fed independence: the panic of 1907
The Fed was established in 1913 following the Panic of 1907, a major financial crisis. It saw major banks collapse, the stock market drop nearly 50%, and credit markets freeze across the country.
At the time, the US had no central authority to inject liquidity into the banking system during emergencies or to prevent cascading bank failures from toppling the entire economy.
J.P. Morgan personally orchestrated a bailout using his own fortune, highlighting just how fragile the US financial system had become.
The debate that followed revealed that while the US clearly needed a central bank, politicians were objectively seen as poorly positioned to run it.
Previous attempts at central banking had failed partly due to political interference. Presidents and Congress had used monetary policy to serve short-term political goals rather than long-term economic stability.
So it was decided that a stand-alone body responsible for making all major economic decisions would be created. Essentially, the Fed was created because politicians, who face elections and public pressure, couldn’t be relied upon to make unpopular decisions when needed for the long-term economy.
Although the Fed is designed to be an autonomous body, separate from political influence, it still has accountability to the US government (and thereby US voters).
The President is responsible for appointing the Fed Chair and the seven Governors of the Federal Reserve Board, subject to confirmation by the Senate.
Each Governor serves a 14-year term, and the Chair serves a four-year term. The Governors' terms are staggered to prevent any single administration from being able to change the entire board overnight.
Beyond this “main” board, there are twelve regional Federal Reserve Banks that operate across the country. Their presidents are appointed by private-sector boards and approved by the Fed's seven Governors. Five of these presidents vote on interest rates at any given time, alongside the seven Governors.
This creates a decentralised structure where no single person or political party can dictate monetary policy. Changing the Fed's direction requires consensus across multiple appointees from different administrations.
The case for Fed independence: Nixon, Burns, and the inflation hangover
The strongest argument for keeping the Fed independent comes from Nixon’s time as president in the 1970s.
Nixon pressured Fed Chair Arthur Burns to keep interest rates low in the lead-up to the 1972 election. Burns complied, and Nixon won in a landslide. Over the next decade, unemployment and inflation both rose simultaneously (commonly referred to now as “stagflation”).
By the late 1970s, inflation exceeded 13 per cent, Nixon was out of office, and it was time to appoint a new Fed chair.
That new Fed chair was Paul Volcker. And despite public and political pressure to bring down interest rates and reduce unemployment, he pushed the rate up to more than 19 per cent to try to break inflation.
The decision triggered a brutal recession, with unemployment hitting nearly 11 per cent.
But by the mid-1980s, inflation had dropped back into the low single digits.
Pre-Volcker era inflation vs Volcker era inflation | FRED
Volcker stood firm where non-independent politicians would have backflipped in the face of plummeting poll numbers.
The “Volcker era” is now taught as a masterclass in why central banks need independence. The painful medicine worked because the Fed could withstand political backlash that would have broken a less autonomous institution.
Are other central banks independent?
Nearly every major developed economy has an independent central bank. The European Central Bank, Bank of Japan, Bank of England, Bank of Canada, and Reserve Bank of Australia all operate with similar autonomy from their governments as the Fed.
However, there are examples of developed nations that have moved away from independent central banks.
In Turkey, the president forced its central bank to maintain low rates even as inflation soared past 85 per cent. The decision served short-term political goals while devastating the purchasing power of everyday people.
Argentina's recurring economic crises have been exacerbated by monetary policy subordinated to political needs. Venezuela's hyperinflation accelerated after the government asserted greater control over its central bank.
The pattern tends to show that the more control the government has over monetary policy, the more the economy leans toward instability and higher inflation.
Independent central banks may not be perfect, but they have historically outperformed the alternative.
Turkey’s interest rates dropped in 2022 despite inflation skyrocketing
Why do markets care about Fed independence?
Markets generally prefer predictability, and independent central banks make more predictable decisions.
Fed officials often outline how they plan to adjust policy and what their preferred data points are.
Currently, the Consumer Price Index (CPI), Personal Consumption Expenditures (PCE) index, Bureau of Labor Statistics (BLS) monthly jobs reports, and quarterly GDP releases form expectations about the future path of interest rates.
This transparency and predictability help businesses map out investments, banks to set lending rates, and everyday people to plan major financial decisions.
When political influence infiltrates these decisions, it introduces uncertainty. Instead of following predictable patterns based on publicly released data, interest rates can shift based on electoral considerations or political preference, which makes long-term planning more difficult.
The markets react to this uncertainty through stock price volatility, potential bond yield rises, and fluctuating currency values.
The enduring logic
The independence of the Federal Reserve is about recognising that stable money and sustainable growth require institutions capable of making unpopular decisions when economic fundamentals demand them.
Elections will always create pressure for easier monetary conditions. Inflation will always tempt policymakers to delay painful adjustments. And the political calendar will never align perfectly with economic cycles.
Fed independence exists to navigate these eternal tensions, not perfectly, but better than political control has managed throughout history.
That's why this principle, forged in financial panics and refined through successive crises, remains central to how modern economies function. And it's why debates about central bank independence, whenever they arise, touch something fundamental about how democracies can maintain long-term prosperity.
Gold's breakthrough above US$5,000 and silver's surge through US$100 signal this year could be one for the history books for metal traders (one way or another).
Quick facts
Elevated safe-haven demand lifts Gold targets from US$5,400 to US$6,000 after early-year US$5,000 breakout.
Artificial intelligence (AI) and data-centre infrastructure ramp-up could help drive silver and copper demand.
Continued geopolitical uncertainty and shifting monetary policy could trigger metal volatility throughout the year.
Top 5 metals to watch in 2026
1. Gold
Gold's breakout over US$5,100 arrived three quarters ahead of some forecasts. With Bank of America quickly raising its end-of-year target to US$6,000 and Goldman Sachs projecting US$5,400, the safe-haven commodity remains the biggest asset in focus for 2026.
Key drivers:
Central banks are currently buying an average of 60 tonnes of gold per month, compared to 17 tonnes pre-2022.
Two Fed rate cuts are priced in for 2026, reducing the opportunity cost of holding non-yielding assets like gold.
Trump tariff policies, Middle East tensions, and fiscal sustainability concerns are keeping safe-haven demand elevated.
Gold's share of total financial assets hit 2.8% in Q3 2025, with room to grow as retail FOMO kicks in.
What to watch
Jerome Powell is set to be replaced as Fed chair in May 2026. Actual policy direction post-replacement may differ from current market expectations for cuts.
If geopolitical hedges into safe havens remain or if there is an unwinding like post- 2024 US election.
The potential weaponisation of dollar asset holdings by European nations as a response to US tariffs.
Silver is the metal that has benefited the most from the 2025 AI boom, with its surge to US$112 all-time-highs to kick off 2026 (70% above fundamental value as per Bank of America signal), demonstrating its volatile potential.
Key drivers
Industrial demand from AI infrastructure, solar, and electric vehicles (EVs), semiconductors and data centres currently has no viable substitute for silver's conductivity.
Six consecutive years of supply deficit, with above-ground stocks depleting and recycling bottlenecks limiting secondary supply.
Policy optics may matter. The US decision to add silver to its list of “critical minerals” has been cited as a potential factor in volatility, including around trade policy risk.
Retail participation can amplify price moves, particularly when the demand for gold becomes “too expensive”.
What to watch
If solar panel demand continues its trajectory, or if 2025 was the peak.
Whether the recycling supply responds to record prices by increasing silver refining and material processing capacity.
How exchange inventory and lease rates move as potential signals of physical tightness.
Copper's 2026 story hinges on continued data centre demand, renewable energy infrastructure growth, and China's struggling property market.
Key drivers
Data centre copper consumption is projected to hit 475,000 tonnes in 2026, up 110,000 tonnes from 2025.
Worker strikes in Chile and Grasberg restart delays are keeping the Copper market structurally tight.
The US tariff decision on refined copper imports is expected in mid-2026 (15%+ currently anticipated), creating potential stockpiling and trade flow distortions.
Goldman Sachs has forecast that power grid infrastructure and EV buildout could add "another United States" worth of copper demand by 2030.
Current Chinese property weakness is creating demand uncertainty, potentially offsetting infrastructure spending.
What to watch
Whether Grasberg ramps production smoothly or faces further setbacks.
Chinese property market stimulus effectiveness.
Actual tariff implementation timing and magnitude.
Yangshan premium movements signalling real physical demand versus financial positioning.
Goldman Sachs forecasts copper prices to drop to $11,000 per tonne by the end of 2026
4. Aluminium
Trading near three-year highs of US$3,200, aluminium faces continued tightness into 2026 as China's capacity ceiling forces global markets to adjust.
Key drivers
China's 45 million tonne capacity cap was reached in 2025. For the first time in decades, Chinese output cannot expand, potentially ending 80% of global supply growth.
As copper prices increase, Reuters has reported that some manufacturers have been substituting aluminium for copper in certain applications as relative prices shift.
What to watch
South32 has said Mozal Aluminium is expected to be placed on care and maintenance around 15 March 2026, thus removing Mozambique's 560,000 tonne significant supply.
If Indonesian and Chinese offshore capacity additions can compensate for Chinese domestic ceiling.
Century Aluminium's 50,000 tonne Mount Holly restart in Q2 could provide a signal for the broader industry as the smelter is expected to reach full production by 30 June 2026.
Projected 2026 Aluminium deficit after Mozal shutdown. Source: IAI, WBMS, ING Research
5. Platinum
Platinum's breakout above US$2,800 follows three consecutive years of supply deficit and increased adoption of hydrogen fuel cells (for which it is a vital component).
Key drivers
The World Platinum Investment Council (WPIC) has forecast a significant supply deficit of 850,000 ounces in 2026 which could drain inventories, with limited new production coming online.
WPIC forecasts 875,000 to 900,000 oz uptake by 2030 for heavy-duty trucks, buses, and green hydrogen electrolysers.
Palladium-to-platinum substitution in catalytic converters is increasing in EV production.
What to watch
Supply response from producers. Platreef and Bakubung are adding 150,000 oz, but production discipline could limit a broader ramp-up.
US tariffs on Russian palladium could create spillover demand for platinum in EV production.
The pace of hydrogen infrastructure investment and heavy-duty vehicle adoption rates in Europe, China, and US.
Chinese jewellery demand could come into play. Just a 1% substitution from gold could widen the platinum deficit by 10% of the global supply.
Projected hydrogen fuel cell growth 2025-2030
You can trade Gold, Silver, and other Commodity CFDs, including energies and agricultural products, on GO Markets.
Venezuela commands the world's largest proven oil reserves at 303 billion (bn) barrels (bbl). Yet political turmoil, global sanctions, and recent US intervention show that being the biggest isn’t always best.
What does this mean for oil markets?
The concentration of reserves among Organization of the Petroleum Exporting Countries (OPEC) members (60% of the global total) gives the group ongoing influence on supply policy and market sentiment, even as US shale provides a production counterweight.
Venezuela's potential return as a major exporter post-US intervention could eventually ease supply constraints, though most analysts view significant production increases as years away.
Sanctions could create a situation where discounted crude seeks buyers willing to navigate compliance risks. Refiners with heavy crude processing capability may benefit from price differentials if Venezuelan barrels increase.
While reserves appear abundant, economically recoverable volumes depend on sustained high prices. If renewable adoption accelerates and demand peaks sooner than projected, stranded assets become a material risk for reserve-heavy producers.
Top 10 countries by proven oil reserves
1. Venezuela – 303 billion barrels
Controls 18% of global reserves, primarily extra-heavy crude in the Orinoco Belt requiring specialised refining.
Heavy crude typically trades $15-$20 below Brent benchmarks due to high sulphur content and complex processing requirements.
Output crashed by 60% from 2.5 million bpd in 2014 to less than 1 million barrels per day (BPD) last year.
Approximately 80% of exports flow to China as loan repayments, with export revenues dwarfed by reserve potential.
2. Saudi Arabia – 267 billion barrels
The majority of its light, sweet crude oil requires minimal refining and commands premium prices, contributing to world-leading exports of $191.1 bn in 2024.
Maintains 2-3 million bpd of spare production capacity, providing a stabilising buffer during supply disruptions.
Oil comprises roughly 50% of the country’s GDP and 70% of its export earnings.
Production decisions significantly impact international oil prices due to market dominance.
Heavy Western sanctions severely limit the country’s ability to monetise and access international markets.
Production estimates vary significantly (2.5-3.8 million bpd) due to sanctions, limited transparency, and restricted international reporting.
Significant crude volumes flow to China through discount arrangements and sanctions-evading mechanisms.
Sanctions relief could rapidly boost production toward 4-5 million bpd, though domestic consumption (12th globally) reduces export potential.
4. Canada – 163 billion barrels
Approximately 97% of reserves are oil sands (bitumen) requiring steam-assisted extraction and significant upfront capital investment.
Political stability and regulatory frameworks position Canada as a secure source compared to volatile producers, with direct pipeline access to US refineries.
Supplied over 60% of US crude oil imports in 2024, making Canada America's top source by far.
5. Iraq – 145 billion barrels
Decades of war and sanctions have prevented optimal field development and infrastructure modernisation.
Improved security conditions since 2017 have enabled production recovery, but pipeline attacks and ageing facilities continue to constrain output.
Oil revenue comprises over 90% of government income, creating extreme fiscal vulnerability.
Exports flow primarily to China, India, and Asian buyers seeking a reliable Middle Eastern supply, with most production from super-giant southern fields near Basra.
6. United Arab Emirates – 113 billion barrels
Produces primarily medium-to-light sweet crude commanding premium prices, ranking fourth globally in export value at $87.6 bn.
Has successfully diversified its economy through tourism, finance, and trade, reducing oil's GDP share compared to Gulf peers.
Strategic location near the Strait of Hormuz and openness to international oil companies help facilitate efficient global distribution.
7. Kuwait – 101.5 billion barrels
Reserves are concentrated in ageingsuper-giant fields like Burgan, which require enhanced recovery techniques.
Favourable geology enables extraction costs around $8-$10 per barrel, with proven reserves providing 80+ years of supply at current production rates.
Oil comprises 60% of GDP and over 95% of export revenue.
8. Russia – 80 billion barrels
The world's third-largest producer despite ranking eighth in reserves.
Post-2022, Western sanctions redirected crude flows from Europe to Asia, with China and India now absorbing the majority at discounted prices.
Despite export restrictions and G7 price cap at $60/barrel, it posted the second-highest global export value at $169.7 bn in 2024.
Russian Urals crude typically trades $15-30 below Brent due to quality, sanctions, and logistics, with November 2024 revenues declining to $11 bn.
9. United States – 74.4 billion barrels
The shale revolution through horizontal drilling and hydraulic fracturing has made the US the world's No.1 oil producer despite holding only the 9th-largest reserves.
The Permian Basin accounts for nearly 50% of production, with shale/tight oil representing 65% of total output.
Achieved net petroleum exporter status in 2020 for the first time since 1949, with crude exports growing from near-zero in 2015 to over 4 million bpd in 2024.
The US government maintains a strategic reserve of 375+ million barrels.
10. Libya – 48.4 billion barrels
Holds Africa's largest proven oil reserves at 48.4 bn barrels, producing light sweet crude commanding premium prices.
Rival bordering governments compete for oil revenue control, causing production to fluctuate based on political conditions.
Oil facilities face blockades, militia attacks, and political leverage tactics, preventing consistent returns.
Favourable geology enables extraction costs around $10-15 per barrel, with geographic proximity making Libya a natural supplier to European refineries.
You can trade Oil and other Commodity CFDs, including metals, energies, and agricultural products, on GO Markets.
If you've spent any time looking at a trading terminal, you've seen it. A news headline breaks, a chart line snaps, and suddenly everyone is rushing for the same exit or the same entrance. It looks like chaos. In practice, it is often a chain of mechanical responses.
This matters for a couple of reasons. Many readers assume the story is the trade. It is not. The story, whether it is an interest rate decision, a supply shock or an earnings miss, is the fuel and the playbook is the engine.
Below are seven core strategies often used in contracts for difference (CFDs) trading. With CFDs, you are not buying the underlying asset. You are speculating on the change in value. That means a trader can take a long position if the price rises, or a short position if it falls.
Seven strategies to understand first
1. Trend following (the establishment play)
Trend following works on the idea that a market already in motion can remain in motion until it meets a clear structural obstacle. Some market participants view it as a chart-based approach because it focuses on the prevailing direction rather than trying to call an exact turning point.
The rationale: The aim is to identify a clear directional bias, such as higher highs and higher lows, and follow that momentum rather than position against it.
What traders look for: Exponential moving averages (EMAs), such as the 50-day or 200-day EMA, are commonly used to interpret trend strength, though indicators can produce false signals and are not reliable on their own.
Source: GO Markets | Educational example only.
How it works: The 50-period EMA can act as a dynamic support level that rises as price rises. In an uptrend, some traders watch for the market to make a new higher high (HH), then pull back towards the EMA before moving higher again. Each higher low (HL) may suggest buyers are still in control.
When price touches or comes close to the 50-period EMA during that pullback, some traders treat that area as a potential decision zone rather than assuming the trend will resume automatically.
What to watch: The sequence of HHs and HLs is part of the structural evidence of a trend. If that sequence breaks, for example if price falls below the previous HL, the trend may be weakening and the setup may no longer hold.
2. Range trading (the ping-pong play)
Markets can spend long stretches moving sideways. That creates a range, where buyers and sellers are in temporary balance. Range trading is built around this behaviour, focusing on moves near the bottom and top of an established range.
The rationale: Price moves between a floor, known as support, and a ceiling, known as resistance. Moves near those boundaries can help define the width of the range.
What traders look for: Some traders use oscillators such as the Relative Strength Index (RSI) to help judge whether the asset looks overbought or oversold near each boundary.
Source: GO Markets | Educational example only.
How it works: The support level is a price zone where buying interest has historically been strong enough to stop the market from falling further. The resistance level is where selling pressure has historically prevented further gains.
When price approaches support, some traders look for signs of a potential rebound. When it approaches resistance, they look for signs that momentum may be fading. RSI readings below 35 can suggest the market is oversold near support, while readings above 65 can suggest it is overbought near resistance.
What to watch: The main risk in range trading is a breakout, when price pushes decisively through either level with strong momentum. This may signal the start of a new trend and using a stop-loss just outside the range on each trade may help manage that risk.
3. Breakouts (the coiled spring play)
Eventually, every range comes under pressure. A breakout happens when the balance shifts and price pushes through support or resistance. Markets alternate between periods of low volatility, where price moves sideways in a tight range, and high-volatility bursts where price can make a larger directional move.
The rationale: Quiet consolidation can sometimes be followed by a broader expansion in volatility. The tighter the compression, the more energy may be stored for the next move.
What traders look for: Bollinger Bands are often used to interpret changes in volatility. When the bands tighten, a squeeze is forming. Some market participants view a move outside the bands as a sign that conditions may be changing.
Source: GO Markets | Educational example only.
How it works: Bollinger Bands consist of a middle line, the 20-period moving average, and 2 outer bands that expand or contract based on recent price volatility. When the bands narrow and come close together, the squeeze, the market has been unusually calm.
This is often described as a coiled spring. Energy may be building, and a sharper move can follow. Some traders treat the first move through an outer band as an early clue on direction, rather than a definitive signal on its own.
What to watch: Not every squeeze leads to a powerful breakout. A false breakout occurs when price briefly moves outside a band, then quickly reverses back inside. Waiting for the candle to close outside the band, rather than entering mid-candle, can reduce the risk of being caught in a false move.
4. News trading (the deviation play)
This is event-driven trading. The focus is on the gap between what the market expected and what the data or headline actually delivered. Economic data releases, such as inflation figures (CPI), employment reports and central bank decisions, can cause sharp, fast moves in financial markets.
The rationale: High-impact releases, such as inflation data or central bank decisions, can force a fast repricing of assets. The bigger the surprise relative to expectations, the larger the move may be.
What traders look for: Traders often use an economic calendar to track timing. Some focus on how the market behaves after the initial reaction, rather than treating the first move as definitive.
Source: GO Markets | Educational example only.
How it works: Before the news, price may move in a calm, tight range as traders wait. When the data is released, if the actual reading differs significantly from the consensus expectation, repricing can happen fast.
Gold, for example, may spike sharply on a CPI reading that comes in above expectations. However, the candle can also print a very long upper wick, meaning price reached the spike high but was then rejected strongly. Sellers may step in quickly, and price may retrace. This spike-and-retrace pattern is one of the more recognisable setups in news trading.
What to watch: The direction and size of the initial spike do not always tell the full story. Wick length can offer an important clue. A long wick may suggest the initial move was rejected, while shorter wicks after a data release may indicate a more sustained directional move.
5. Mean reversion (the rubber-band play)
Prices can sometimes move too far, too fast. Mean reversion is built on the idea that an overextended move may drift back towards its historical average, like a rubber band pulled too tight, then snapping back.
The rationale: This is a contrarian approach. It looks for stretches of optimism or pessimism that may not be sustainable, and positions for a return to equilibrium.
What traders look for: A common example is price moving well away from a 20-day moving average (MA) while RSI also reaches an extreme reading. In that setup, traders watch for a move back towards the mean rather than a continuation away from it.
Source: GO Markets | Educational example only.
How it works: The 20-period MA represents the market's recent average price. When price moves into an extreme zone, such as more than 3 standard deviations above or below that average, it has moved a long way from its recent trend.
An RSI above 70 can suggest the market is stretched to the upside, while below 30 can suggest the same to the downside. Some mean reversion traders use these combined signals as a sign that a pullback towards the 20-period MA may be possible, rather than assuming the move will continue to extend.
What to watch: Mean reversion strategies can carry significant risk in strongly trending markets. A market can remain extended for longer than expected, and a position entered against the short-term trend can generate large drawdowns. Position sizing and clear stop-losses are critical.
6. Psychological levels (the big figure play)
Markets are driven by people, and people tend to focus on round numbers. US$100, US$2,000 or parity at 1.000 on a currency pair can act as magnets. In financial markets, certain price levels can attract a disproportionate amount of buying and selling activity, not because of technical analysis alone, but because of human psychology.
The rationale: Large orders, stop-losses and take-profit levels can cluster around these big figures, which may reinforce support or resistance. This self-reinforcing behaviour is one reason these rejections can become meaningful for traders.
What traders look for: Traders often watch how price behaves as it approaches a round number. The market may hesitate, reject the level or break through it with momentum. Multiple wick rejections at the same level may carry more weight than a single one.
Source: GO Markets | Educational example only.
How it works: When price approaches a round number from below, some traders watch for long upper wicks, the thin vertical line above the candle body. A long upper wick means price reached that level, but sellers stepped in aggressively and pushed it back down before the candle closed.
One wick rejection may be notable. Three in a cluster may be more significant. Some traders use this accumulated rejection as part of the case for a short (sell) setup at that level.
What to watch: Psychological levels can also act as magnets in the opposite direction. If price breaks through with conviction, the level may then act as support. A decisive close above the level, rather than just a wick break, can be an early sign that the rejection setup is no longer holding.
7. Sector rotation (the economic season play)
This is a macro strategy. As the economic backdrop changes, capital may move from higher-growth sectors into more defensive ones, and back again. Not all parts of the sharemarket move in the same direction at the same time.
The rationale: In a slowing economy, discretionary spending may weaken while demand for essential services can remain more stable. Investors may rotate capital between sectors accordingly.
What traders look for: With CFDs, some traders express this view through relative strength, taking exposure to a stronger sector while reducing or offsetting exposure to a weaker one.
Source: GO Markets | Educational example only.
How it works: During a growth phase, when the economy is expanding, investors tend to prefer growth-oriented sectors like technology. As the economic environment shifts, perhaps due to rising interest rates, slowing earnings or increasing recession risk, a rotation point may emerge.
In the slowdown phase, the pattern can reverse. Technology may weaken while utilities may strengthen, as investors move capital into defensive, income-generating sectors. Early signals can include relative underperformance in growth sectors combined with unusual strength in defensives.
What to watch: Sector rotation is not usually an overnight event. It typically unfolds over weeks to months. Tracking the ratio between two sectors, often shown in a relative strength chart, can make this shift visible before it becomes obvious in absolute price terms.
Why risk management is the engine of survival
The headline move is one thing. The market implication for your account is another. If you do not manage the mechanics, the strategy does not matter.
Because CFDs are traded on margin, a small market move may have an outsized impact on the account. If leverage is too high, even a minor wobble may trigger a margin call or automatic position closure, depending on the provider's terms. This is not a theoretical risk. It is a common reason new traders lose more than they expected on a trade that was directionally correct.
The market does not always move in a straight line. Sometimes, price gaps from one level to another, especially after a weekend or major news event and in those conditions, a stop-loss may not be filled at the exact requested price. That is known as slippage. It is one reason large positions may carry additional risk into major announcements.
Bottom line
The vehicle is powerful, but the playbook is what helps keep you on the road.
The obvious trade is often already priced in. What matters more is understanding which market condition is in front of you. Is it trending, ranging, breaking out or simply reacting to a headline?
Readers assessing leveraged products often focus on position sizing, risk limits and product disclosure before deciding whether the product is appropriate for them. The headlines will keep changing. The maths of risk management does not.
Disclaimer: This article is general information only and is intended for educational purposes. It explains common trading concepts and market behaviours and does not constitute financial product advice, a recommendation, or a trading signal. Any examples are illustrative only and do not take into account your objectives, financial situation or needs. CFDs are complex, leveraged products that carry a high level of risk. Before acting, consider the PDS and TMD and whether trading CFDs is appropriate for you. Seek independent advice if needed. Past performance is not a reliable indicator of future results.
Last week was as consequential as advertised. The RBA hiked, the Fed held, and markets barely had time to process any of it before reports emerged that Israel had struck Iran's South Pars gas field.
The week ahead brings fewer central bank decisions, but it may be just as important for markets. Flash PMIs will offer the first broad read on whether the war is already showing up in business confidence. Australia's February CPI is the domestic data point that matters most for the RBA's next move. And the oil market remains the dominant macro variable.
Quick facts
Brent crude spiked above $110 per barrel after Israel struck Iran's South Pars gas field for the first time.
Flash PMIs for Australia, Japan, the eurozone, UK, and the US all land Tuesday.
Australia's February CPI lands Wednesday, the first inflation read since the back-to-back RBA hikes.
Oil: From crisis to emergency
The oil situation deteriorated significantly last week. Brent crude has now surged roughly 80% since the war began on 28 February.
The 18 March strike on Iran's South Pars gas field was the first time upstream oil and gas infrastructure has been targeted.
Iran responded to the strike by threatening to target facilities across Saudi Arabia, the UAE and Qatar. If any of these threats are executed, the global oil shock would escalate from a supply disruption to a direct attack on the region's production capacity.
Analysts are now saying $150 Brent is achievable and $200 is not outside the realm of possibility. The 1970s Arab oil embargo resulted in a quadrupling of prices, and the current shock is already being described in those terms by senior energy executives.
For markets this week, oil is the dominant variable. Any signal of ceasefire, diplomatic progress or resumed Hormuz shipping could likely trigger a correction in oil prices. Any Iranian strike on Gulf infrastructure could send them higher.
Monitor
Daily vessel transit numbers through the Strait of Hormuz.
Iranian retaliation against Gulf infrastructure, a strike on Saudi or UAE facilities would be a major escalation.
When and how American and European IEA reserves reach the market.
Qatar's South Pars disruption is affecting the European LNG market.
Trump statements that could cause intraday oil price movement.
Global Flash PMIs: The first read on an economy at war
Tuesday delivers the S&P Global flash PMI estimates for March across every major economy simultaneously.
This will be the first data set to capture how manufacturers and services firms are responding to $100+ oil, the Strait of Hormuz blockade, and the broader uncertainty created by the war in the Middle East.
The key question for each economy is whether the oil price surge and war uncertainty have dented business confidence, suppressed new orders or pushed input price indices to new multi-year highs.
Given that oil crossed $100 before the survey window closed for most economies, input cost readings could be significantly elevated.
Key dates
S&P Global Flash Australia PMI: Tuesday 24 March, 9:00 am AEDT
S&P Global Flash Japan PMI: Tuesday 24 March, 11:30 am AEDT
HSBC Flash India PMI: Tuesday 24 March, 4:00 pm AEDT
HCOB Flash France PMI: Tuesday 24 March, 7:15 pm AEDT
The RBA hiked for the second meeting in a row on 17 March, lifting the cash rate to 4.10% in a narrow 5-4 vote.
Governor Bullock described it as a "very active discussion" where the direction of policy was not in question, only the timing.
This week will see the release of February's CPI as the first read to capture any of the oil shock. The trimmed mean, which strips out volatile items including fuel, will be the number the RBA watches most closely. A reading above 3.5% could cement the case for a May hike. A softer result could revive the argument for a pause.
ANZ and NAB have both stated expectations of a third hike in May, taking the cash rate to 4.35%.
Key dates
ABS Consumer Price Index (CPI): Wednesday 25 March, 11:30 am AEDT
Monitor
Trimmed mean inflation as the RBA's preferred measure.
Fuel and energy components that could separate the oil shock from domestic price pressure.
Housing and services inflation as sticky components driving the RBA's long-run concern.
