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The Forex Markets & The Covid Effect!

Markets, the Covid effect

This is a 5-day chart of the Great British pound US Dollar pair, where we can see a rise of price from 1.2790 to a high of 1.3170 before the pair fell back at the end of trading on the 31ST July. Much of the move higher has been due to an overall decrease in the performance of the United States dollar and where extreme volatility crept into the market on Wednesday 29th August, when the federal reserve held are interest rates on hold but where the FOMC comments at the press conference were extremely rubbish regarding the outlook for the American economy as the continuation of the covered virus escalates within the United States.
The volatility continued on Thursday, when unemployment data in the form of continuing jobless claims in the United States showed an increase, and more importantly, the annualised second-quarter gross domestic product figure was released for the US at – 32.9%, the biggest such drop in history. The US dollar was heavily battered as a result, giving an uplift to the pound, Euro, AUD, NZD, and others.

Incredibly, this is a Dow Jones industrial average daily chart, which shows that while the Dow took a dip down to just above 26,000 on the last day of trading for July, it subsequently rallied to 26,482 at the close. Naturally, analysts, market commentators’ and traders alike are bewildered by the fact that the United States posted its biggest loss in gross domestic product in such a short time frame in history, and yet the Dow Jones remained unscathed.

So, what can we expect in the ensuing weeks? With regard to the Dow Jones, it’s pretty much being driven by technical analysis and where the big numbers such as 26,000 seem to be holding as support and where the recent attempt to breach 27,000 failed and can therefore for the assumed to be a resistance level. Larger sized institutions are looking at the long term rather than the short term. They believe that a v-shaped recovery is possible and that when suitable medical solutions are found to minimise the impact of Covid on individuals to perhaps where it can be managed to almost like cold virus, or flu symptoms levels, the American economy can return to normal very quickly. However, pessimism is more and more creeping into the markets as top analysts scratch their heads and talk up the possibility of another crash in US equities. However with regard to the United States dollar, we should expect a toing and froing effect, with more volatility, and where bad news will affect the US dollar performance during certain times of the days and weeks and whereby bad news regarding the UK and Europe, such as what we are seeing at the moment regarding further lockdown measures being implemented by the British government as cases of Covid escalate, and whereby further outbreaks in covid are being seen across Europe can be considered to be bad for both the UK and the Eurozone economies, in which case you might expect a reversal in the euro and the British pound such as we saw on the last day of trading for July when these major currency pairs reversed from sharp rallies.

Sentiment is playing a large role in the majors, with USDJPY bouncing off of multi-month lows, as seen on this monthly chart, as investors buy yen as a safe haven currency.

Similarly, for the USDCHF pair, which has been sold heavily to a low at the end of July, as seen on this monthly chart, to 0.9100, again a multi-month low as investors buy the Swiss franc for its safe-haven status.


Crypto Daily Topic

How Blockchain is Being Deployed to Support Anti-Coronavirus Efforts All over the World

Blockchain is being used in the fight against Covid-19, the novel disease that emanated from China’s Wuhan in December last year and has spread to almost every territory in the world. As at the time of writing, 98, 387 people have died from the disease, and a 1, 633, 083 others have been infected. 

Governments and other organizations are scrambling to fight off the disease, and blockchain is aiding these efforts. Universities, the medical, and the private sectors are harnessing the power of blockchain to fight the virus. 

Let’s take a look at some of the ways: 

Blockchain for Monitoring Coronavirus Data 

Hashlog is a blockchain-based data visualization tool by blockchain applications developer, Acoer. Via Hashlog, people can understand and follow the global spread and impact of the virus easily. It combines information and data from a large set of publicly available data, including the World Health Organization’s. 

Hashlog maintains an updated catalog of the total number of infections worldwide, deaths from the disease, cases per country, as well as trends on Google based on interest and region. Thanks to the immutable nature of blockchain, data shared cannot be manipulated or altered in any way. The tool is automated such that data is updated automatically, and researchers and scientists can have a dynamic dashboard to guide them in their work.

Blockchain for Contract Tracing 

Pennsylvania’s Villanova University Department of Electrical And Computer Engineering is developing a platform to fight against the Coronavirus by utilizing a trio of blockchain, artificial intelligence (AI), and internet of things (IoT) technologies to assist healthcare facilities track coronavirus cases globally. 

The system relies on a private blockchain accessible by healthcare facilities all over the world to publish Covid-19’s test results among doctors on a transparent, secure, and immutable ledger. IoT and AI are used to conduct surveillance on public spaces where people would originally gather, but which would be high-risk for now. Any such gathering triggers alerts over the blockchain. 

These alerts will assist health care providers in making more informed and strategic decisions on how to allocate medical resources that are already in short supply. 

Hasshi Sudler, an adjunct professor at the university’s department, told Coindesk: “Medical institutions, whether they know each other or not, whether they trust each other or not, can exchange information about who they know that is infected and to maintain contact with who is infected, over the blockchain.”

Blockchain for Social Distancing

Spherity is a Berlin-based startup that has developed a decentralized identity system that helps Covid-19 patients get medication while maintaining social distance. Through the Spherity prototype, patients can share their digital fingerprints and know-your-customer (KYC) credentials with doctors in a user-friendly cloud-based and blockchain ecosystem. 

Once their patient’s KYC’s credentials are matched with their health records, they can be issued with an electronic prescription with which they can access medication. 

In another case of blockchain assisting the enforcing of social distancing, the Honduran government has deployed a blockchain based app to track and manage social distancing and lockdown orders. The country’s emergency response unit, together with the Inter-American Development Bank, tech startup Emerge, tech company Penta Network have come together to launch a program called Civitas, which will help in managing telemedicine as well as the permission for people to leave their houses for specific errands. 

If someone feels sick, they will engage with healthcare professionals from the National University of Honduras to determine if the symptoms are for Covid-19. Then, people with symptoms suspected to be related to the virus are directed to healthcare facilities that exclusively deals with it, reducing exposure to vulnerable populations in the region’s other hospitals.

Blockchain for Covid-19 research

About 6000 Ethereum miners are contributing to Stanford University’s Folding@home distributed computing Project. This project pools together GPU power from across the world to search for a cure for Covid-19. 

These miners Belong to CoreWeave, the largest US Ethereum mining pool. And now, they are redirecting the processing power of more than 6000 specialized computers towards the project.

Folding@home is a long-standing Research project Dedicated to finding cures for diseases from Alzheimer’s to Ebola and recently, Coronavirus. It aims to do this by connecting thousands of computers from the globe to form one big distributed supercomputer for the research of a cure for the disease. CoreWeave’s GPU machines, which are designed to perform repetitive calculations, double the power of the distributed network. 

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Forex & The Covid 19 Fundamentals! What & How You Need To Be Trading To Realise Huge Profits!

How Is Fundamental Analysis Affecting Forex During Covid-19

There is absolutely no doubt about it since the coronavirus took hold in Europe, the United Kingdom, and the USA, and to a degree at the height of the epidemic in China, where previously markets had shrugged off off the disease as being contained there, the way that markets are now observing fundamental analysis has been completely turned on its head.
Before the virus, the markets were doing very nicely, with record strong economic growth, particularly in the west, and definitely in the USA, which had hit a record for the lowest number of unemployment, and stock indices which were at all-time record highs, and where within a few weeks the country has flipped into a state of record amount of unemployment of over 16 million, and growing, and is facing the worst depression in U.S. history.

Naturally, the financial markets are in a state of pandemonium because this situation is almost unprecedented. Of course, we had the banking crisis in 2008, which sent shock waves through the financial markets, and we have had other virus outbreaks such as Sars, Avian Flu, Swine Flu, and Ebola, which all caused some degree of market turbulence, but nothing on the scale of what we are seeing at the moment.

Normally financial markets, including Forex, Oil, Gold, and Commodities, turn to stock market indices for guidance because they present a good gauge of economic activity. But of course, while most countries are in lockdown, the majority of business sectors are closed, and economies have essentially flatlined. And so GDP, a key area of fundamental analysis, is now useless. In fact, any economic data releases coming out of major western countries right now can only tell us varying degrees of catastrophic failings.
Where once currencies would rise and fall in exchange rates based upon strong data which only fluctuated in relatively small varying degrees, and where markets were able to predict such data releases within a narrow band of expectation, now analysts are gauging the value of one currency against the next on which country is suffering the fewest fatalities and sometimes this causes see-sawing of price action on an hour by hour and day by day basis.
As China slowly begins to come out of the virus and starts opening for business, we should not be surprised to see countries such as Australia and New Zealand, who export heavily into China, to be amongst the first countries to start to bounce back from the virus, especially as they are recording lower numbers deaths at the moment.

This would mean that their currencies strengthen against counterparts and we are seeing that against the U.S. Dollar right now, INSERT B, where 17-year lows of $0.5500 for AUDUSD pair, has recovered to $0.6360 and where the NZDUSD pair hit an eleven-year low of $0.5460 before recovering to $0.6025 currently.

While countries such as the USA, which was the last continent to be affected, are directly in an area of focus right now because of the exponential death rate and the fact that it is the largest economy on the planet. And although so it might end up being the most severely affected country, both in terms of people suffering and dying from the condition and also its economy taking a huge hit, in both unemployment and its GDP going into the minus territory, the thing that is stopping a complete stock market annihilation is the fact that the Federal Reserve acted quickly to slash interest rates and enter into one of the biggest quantitative easing programs in history in order to bolster the finances of small to large businesses across the United States, to try and stave off mass bankruptcies, and the offer of financial relief to the majority of its population.

This has helped us stock indices to bounce off their lows and steady themselves to a certain extent. And, surprisingly, the U.S. dollar index is actually higher than before the crisis. So are people now looking at the U.S. Dollar as being a safe haven currency? Probably. So what now? Well we know that for at least the next few months economic data coming out of Western countries is going to be bad with economies flatlining and grinding into negative territory across the board with gross domestic product tanking in each country
Also as we have seen in recent economic data releases coming from the United States, such as the weekly unemployment numbers, which are getting worse week on week, the markets are largely discounting this information, while betting that the U.S. economy will fare better than most in the long term once things start to recover. Therefore analysts are predicting that all western countries will record high levels of unemployment, and negative gross domestic product numbers, but the hope is that these will be short shocks and that as long as the virus is contained in a short period of time, those economies are likely to bounce back and grow strongly.
And so, the big question is how to trade the foreign exchange markets based on fundamental analysis? The best advice that we could give you is to expect the unexpected which you should do anyway, but even more so right now. Because we know that data numbers coming for all countries are going to be bad to horrendous, and some of the big players out there will completely be ignoring the data and strategize their forex trading based on technical analysis only, and that would be our advice to you too. Stay out of the market during times of economic data releases especially, reduce your trading size, and tighten your stop losses.