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Forex Videos

Biden Shows His Cards – This Is How The Market Is Preparing To React!


Biden shows his cards, markets are rattled! – where next for the US Dollar?

Thank you for joining this forex academy educational video.

On Thursday the 14th of January, president-elect Joe Biden addressed the US nation and said that ‘’the $600 already appropriated is simply not enough’’. 

He carried on by saying that the new democrat government would issue another round of $1,400, on top of.the $600 payments, thus showing his hand with regard to the 15 million adult dependants relying on these stimulus checks.  This segment of the Covid relief package runs to 1.9 trillion dollars. 

With yet many more millions of Americans, including migrants, who have slipped the net with regard to relief packages, the wranglers about entitlement will go on as long as the pandemic continues to run rife throughout the United States.  With some young adults purchasing new cars with the extra cash, and others boasting of savings of $13,000 from the relief payments, it is hardly surprising that there will be continued frictions between the two parties, let alone the public and pressure groups, which will only go to show that this is not a one-size-fits-all policy.

Markets saw volatility following the comments with the dollar index shown here on the daily time frame, recovering from its low of 89.15, in the dollar-weighted average against the pound, the Euro, the yen, Swiss franc Canadian dollar, and Australian and New Zealand dollars. 

Although the rot stopped on the 6th of January, dollar strength has been conforming to this support line, on the 1-hour chart, which was bolstered by Joe Biden’s comments on the 14th , to the point where we have a high of 90.80 at the time of writing.

While the bull run on the US dollar may be partially down to Joe Biden’s covid relief policy,  there are other factors to consider, including the buy the rumour sell the fact trading phenomenon, where market participants were largely expecting the incoming President to instigate a larger relief package and especially now that the democrats are in control in Congress, thus making it more easily to be able to get through new policies.

Other things to consider, as shown here on the daily cable chart, where the pound to US Dollar pair remains in a bull run, although it has topped out at the 1.37 exchange rate, having achieved the high due to the success of the UK and EU signing a post Brexit free trade deal,  which has been giving the pair a lift, but where the United Kingdom is currently in a tier 4 lockdown due to the increasing covid transmission rate.

 

 Here we can see a daily chart of the euro US dollar pair,  which is by volume the largest traded component  on a weighted basis of the dollar index,  and where we can see CIA Here. 

This is a daily chart of the euro US dollar pair, which by weighted volume is the largest component of the US dollar index. Therefore, it is more likely to be a larger contributing factor to the directional bias of the dollar index.  

Here we have a classic bull run, followed by a period of consolidation, with a continuation bull run, to a high of 1.23, during the beginning of 2021, and where price action has breached the bull run’s resistance line as highlighted and is falling back to just below 1.21 at the time of writing. This is lending itself to the general strength of the US dollar when simultaneously combined with the actions of cable.

And so, although Joe Biden’s covid relief stimulus package would appear to be a pivotal point in the acceleration in the US dollar strength, there are other things to consider, such as multi-month highs, as shown with cable and the Eurodollar pair.  

We also have to factor in the fact that the dollar index failed to breach the 89.00 key level, where the previous high going back to the beginning of the pandemic was 103.00, a hefty grabbing for the dollar, and where traders will always be eying the tops and bottoms of huge moves while looking for turning points.

Traders always expect volatility when there is a change of president, and even more so when there is a change in party, such as in this case where are the outgoing republicans will be replaced by the Democratic party’s polities. The next stage will be waiting to see if the outgoing party’s policies are replaced and, if so, what this might mean for the financial markets.  

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Crypto Videos

Biden’s $3T Stimulus Bill Could Make Bitcoin Explode!

 

Biden’s $3T Stimulus Could Create Another Bitcoin Skyrocket Scenario


The incoming Biden administration’s plan to print almost an infinite amount of money into the US economy and supply it with trillions of dollars could likely ignite the next leg of the Bitcoin bull market, as more investors seek refuge from the United States dollar.
Aan Arlington-based news outlet Axios reported that Joe Biden had asked Congress to provide Americans with a stimulus check of $2,000 to help offset the economic devastation caused by Covid-19. The incoming president has also proposed a tax and infrastructure package as part of his “Build Back Better” program. The package would be worth $3 trillion.

Biden also doubled down on his call for more direct relief to American citizens after Jan 8 disappointing jobs report showing a loss of over 140,000 positions in the last month of 2020.
He stated: “Economic research confirms that, with the current conditions such as the crisis today, especially with such low-interest rates, taking action immediately– even with deficit financing – is certainly going to help the economy overall.”
If 2020 is anything to go by, the new wave of stimulus could be another catalyst for Bitcoin’s rise as more money floods the market and makes prices into assets.

Even the current president Donald Trump, a Republican, has played a role in vast government outlays. Under his leadership, the US passed a historic $2 trillion stimulus package bill in March. Trump also signed a relief package worth $900 billion in December. This document would then pave the way for $600 stimulus checks coming to every American citizen.
The federal government’s inflation-increasing policies have coincided with interventionism coming from the Federal Reserve, which deployed trillions of dollars in 2020 to combat a liquidity crisis and keep overnight rates somewhat under control.

Although the aforementioned policies provided a strong backstop for risk-on assets – a category that has previously included Bitcoin – the emerging narrative surrounding Bitcoin is that it’s a hedge against inflation.
Institutions are currently buying Bitcoin with a clear purpose and are hoping to one day become the industry’s whales.


Bitcoin’s digital gold narrative has recently been one of the biggest catalysts for Bitcoin’s price increase, as well as the institutional shift towards it. This narrative helped fuel BTC’s 300% rally in the previous year, as well as it more than doubling in price in this year alone. This trend could increase in intensity in 2021 as the purchasing power of the US dollar continues to erode.
Even a giant such as JPMorgan Chase publicly acknowledged that Bitcoin is taking market share from gold.

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Forex Market Analysis Forex Videos

Forex & The US Presidential Election – How To Trade Biden VS Trump!

The US Presidential Election – what to expect from the Forex space?

Thank you for joining this Forex academy educational video. In this session, we will be looking at the upcoming US Presidential Election and what could happen in the Forex space in the run up to it and after the winner is announced.

It is a time of uncertainty in the global financial markets, with many Western countries seeing a second wave of the coronavirus, with massive unemployment and peaks and troughs in global gross domestic product, where no sooner can an economy begin to get back on its feet than a second lockdown offers the prospect of greater unemployment, more economic uncertainty and whereby governments are required to bail out their citizens and businesses with vast amounts of quantitative easing, which will see huge debt burdens emerge for generations to come.
Add to this the most contentious US presidential election ever, and it can only mean one thing: uncertainty. And traders and investors, including institutions, do not like uncertainty. It means that they have to diversify their portfolios in order to mitigate against risk.

The basic premise is that should Donald Trump managed to secure a second term in office, he has pledged to continue with the corporate reforms, and he has promised and to continue easing taxes. Whereas Joe Biden has promised to raise corporate taxes, and where he will undoubtedly increase liability on corporations with regard to further reforms and red tape, which has the effect of strangling the performance of the business. Not what you need in times like these.

Before the pandemic took hold in the United States, President Donald Trump was riding high with record-breaking high levels of employment, and record-breaking values in stock markets, largely because of his tax and corporate red tape roll backs and reforms. The investors loved him. He was undoubtedly one of the most successful presidents of all times in terms of the economic performance of the USA.

Fast forward a few months, and he could potentially go down as one of the worst presidents, and this has largely been down to what has been termed by many journalists, economists, and analysts, as well as great swathes of the population in the United States, has having lost grip of the pandemic to the point that he wilfully ignored the damage that it could do in terms of health to its citizens and to the health of the economy.

The polls suggest that he will pay the price and lose the election to Joe Biden.

And because we may see higher taxation and a rollback of reformed policies should Joe Biden become the next president of the United States, this is why we are seeing a pull-back in the US equities markets, and here we can see that the Dow Jones industrial average of the 30 leading companies had made incredible rebounds from the lows of middle of March when the pandemic really hit America hard, add where we almost saw a 100% rebound of the record-breaking high from February of over 29,000 for the index, on the basis that the market believed that the US federal reserve bank was handling the coronavirus well in terms of its interest rate policy and the amount of stimulus being offered by the government and hopes that a vaccine would quickly help the US to recover to pre-crisis levels and beyond.

In this yearly US dollar index chart, which measures the value of the US dollar against the most other widely traded currencies, the so-called majors, including the yen, euro, pound, Swiss franc, and Australian and New Zealand dollars, we can see that it found support at 92.00 in September, after heavily losing out against the majors, and more recently found support at 93.00 before pushing above 94.00. This is what we might expect as the US dollar has often been bought as a safe haven asset in uncertain times, and while the markets try to determine the amount of risk of the unknown, which is what would happen if Joe Biden and the Democrats took power. The dollar is also being bought and stocks sold because the democrats and republicans have not yet been able to reach an agreement on a much-needed extension to the financial stimulus aid package to help keep American firms and the public afloat.
Therefore, no stimulus deal could possibly now be agreed until after the elections, which will lead to more uncertainly, therefore more of the same for stocks and the dollar.
But if Donald Trump is elected for a second term, stocks should rally, and this might have the effect of a stronger US dollar and softer counter currencies, including the majors, perhaps with the exception of the British pound, but only in the event that the UK and EU manage to secure a free trade deal, and also perhaps with the exception to the New Zealand dollar, which is currently being very resilient to the recent upswing in the US dollar.
But if Joe Biden takes power, we would highly likely see extreme market volatility in all financial assets and where the fear of the unknown would offer no real directional bias for the markets in the short term. We also should look at the possibility that even if Biden swept to power, the markets might believe that he could handle the pandemic better than Trump, be less provocative to foreign powers – which could help investment in the USA – and this might also bring back investors into the equities space as a direct result. With the democrats then holding all the aces in Congress, a stimulus deal would be more likely to get through more quickly, and more stimulus should, theoretically, mean a softer US dollar, in which case traders will be looking for opportunities to short it against the majors in particular.
One thing is for certain; the markets are in for a bumpy ride. Traders, be warned.