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Forex Market Analysis

USD/JPY Complex Correction, What does that mean for Traders?

The USDJPY pair is progressing in an Elliott wave complex correction identified as a triple-three pattern (3-3-3-3-3) of Minute degree, labeled in black. The completion of this downward corrective formation suggests the start of a new rally of the same degree.

Technical Overview

The following daily chart shows the USDJPY pair advancing in a corrective structure of Minor degree labeled in green, which began on last March 09th when the price found support at 101.180, from where the price started an aggressive rally that has found resistance and completed wave A in green at 111.715 on March 24th.

According to the Elliot Wave theory’s alternation principle, if the first move is aggressive, the next path should be a slow move elapsing more time than the previous leg. Likely, the second leg will be a triangle or a complex corrective formation. In this regard, the second leg corresponding to wave B in green shows the progress in a triple-three pattern, which follows an internal sequence subdivided into 3-3-3-3-3, where each three is a simple corrective formation.

On the other hand, the MACD oscillator endorses the downward corrective sequence that remains in progress. Likewise, the momentum and timing oscillator confirms the bearish pressure in play. It suggests the possibility of a new decline completing the ending diagonal pattern in progress corresponding to wave (c) of Minuette degree labeled in blue.

Technical Outlook

The long-term outlook for the USDJPY pair under the Elliott Wave perspective, shown in the following daily chart, foresees a potential limited decline until the demand zone, between 102.357 and 101.180, where the price could find fresh buyers expecting to join in the next rally.

The confirmation of its recovery would occur if the USDJPY breaks and closes above the 103.898 level, which corresponds to the end of wave iv of Subminuette degree labeled in green. This potential next rally corresponding to wave C of Minor degree should follow an internal sequence subdivided into five waves. Likewise, if the price extends its gains, USDJPY could continue rallying toward the next supply zone bounded between 109.033 and 109.850. On the other hand, the invalidation of this bullish scenario occurs if the price extends its drops below 101.180.

In summary, the USDJPY pair advances in an incomplete complex corrective pattern identified as a triple-three formation, which currently moves in its third internal segment of wave ((z)). In this regard, the price could decline toward the next demand zone between 102.357 and 101.180. If the price confirms the bottom and starts the rally, the wave C will be confirmed if the price breaks and closes above 103.898. The first potential target is located between 106.561 and 107.050; the second potential target zone is placed between 109.033 until 109.850. Finally, the bullish scenario’s invalidation level is set at 101.180, which corresponds to the March 09th low.

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Forex Chart Basics

If EUR/USD Buying is High, Does That Affect the Fluctuation/Swing in the Chart?

The EUR-USD cross is an intriguing one. With a total of 9.6 million traders in the world, approximately 37% of all volume at the global level is held by this currency pair alone. In fact, not only are the EUR and the USD two of the most traded currencies individually but they also comprise the most liquid pair.

Traders from all corners of the planet seem to love the EUR-USD because of tighter spreads and less slippage, but this currency pair is, at the same time, the Holy Grail for major players in the market.

There are no Coincidences

Forex is dominated by the Interbank Market, which is used by various financial institutions to trade currencies between themselves. Interestingly enough, 50% of this Interbank Market is controlled by the largest banks.

Out of approximately 25 000 banking institutions existing in the world, Deutsche Bank, Citi, JP Morgan Chase, and HSBC are some of the most prominent. And, you should know that their interest lies where yours does as well – profit.

How come?

Well, big banks love to manipulate the prices. Have you ever noticed how the price suddenly changed when everyone was certain that it would keep on going in the same direction? There’s the catch.

Big banks focus on the concentration of activity and they step in right where most traders are to take the cream off. To be specific, it is not just where traders are in the chart at that moment but where most of them are headed. 

How the Big Banks Interfere

It is unfortunate what sentiment can do. Many traders keep using the same tools and indicators and they, logically, end up losing. We may not know the extent of tools the big banks use to maintain control and insight, but the same information is accessible to everyone through IG Client Sentiment Indicator or FXCM SSI

While the big banks have the power to detect market activity, they cannot see your specific order. They can, however, discover if the majority of orders were long or short, based on which they can manipulate the price.

So, the more the orders push the market in a specific direction, the more likely are the banks to interfere and turn everything around.

USD is a Magnet

The choice of currencies can have an equally strong influence on the trade as well. As the USD is always in demand, it is more likely to be always on the big banks’ radar. Any news events concerning the currency will also stir up the market and set the ground for major turbulence.

The USD is, in fact, so prone to react to any news that any tweets of the previous US president, Donald Trump, caused a commotion in the market. Major US economic reports (GDP, employment, producer and consumer price index, retail sales, and trade deficit reports) are also perfect opportunities for the big banks to take their share of traders’ money.

The EUR is specific because the number of reports concerning the currency is higher due to the number of Eurozone member states. Although related economic reports (especially those of France and Germany) are valuable for traders, EUR pairs seem to do well even when they do come out. 

Since any currency combination is determined by both currencies, the EUR-USD (as the most traded and liquid pair) is that more monitored by the big banks.

The big banks’ involvement can be seen in other crosses involving this pair. For example, the EUR-USD pair has historically exhibited a high correlation with the S&P500 as they both involve the US economy. Interestingly enough, these major banking institutions have no significant dominance over precious metals, which typically dictate what will happen with the pair.

Manipulation at its Best

The number of individual orders, as we can see, does not have the power to drive the market. Individual requests cannot affect market movement per se. The only power that can create an imbalance between buying and selling orders is the big banks. 

Anyone trading the EUR-USD can see these sudden changes in prices, which leave behind many unfilled orders on the supply or the demand level. The big banks will use any opportunity to cause such friction to have their orders filled after the price returns to the zone.

These are the reasons why some forex professionals advise beginners to start trading some other currency pairs that are less susceptible to such interferences.

Indicators’ Predicting Power

Many traders use the sentiment to predict future activity in the market, which is a highly volatile and unpredictable tool. While we cannot control the big bank’s involvement, we can limit their impact by not focusing on the number of orders in the market and avoiding circumstances that these major players deem inviting. 

Any indicator is a result-oriented tool that has no power in predicting the future. News will come out and changes will occur in the world, but our task as traders is to adopt the skills that can raise us above the level of sentiment and provide us with stability.

Instead of focusing on the quantity of orders, supply levels, rather strive to determine the overall market direction and evade the banks’ radar as successfully as possible.

Own your Share of Responsibility

It is important to understand also that if big banks ever disappeared, the nature of this market would change entirely. Maybe the volume could change or forex might start to resemble the stock market. That is why it is important to shift the focus from losses and adopt an opportunistic and proactive mindset. How can you take advantage of the big banks’ existence?

The best solution to this challenge is building your own strategy and learning to trust that system. It should help you avoid the patterns the majority of traders keep repeating. This is a classic contrarian trader view of forex.

Trading currencies requires each trader to let go of the herd mentality. You need to become as independent as possible, especially when it comes to heavily monitored and liquid pairs such as EUR-USD. Your best bet is to invest in learning about trading psychology and letting go of the belief that individuals can impact the market.

Knowledge is Power

If you are still unconvinced that sentiment is not your point of reference, at least aim to use credible sources. 

Twitter, for example, offers an excellent pool of information – you can explore updates about IG Client Sentiment Index on DailyFXTeam, learn about more SSI currency pairs on FXCM_MarketData, or discover some invaluable educational materials on www.forex.academy, and build your unique way of trading. 

Finally remember that it is your skillset and toolbox that will allow you to trade the EUR-USD currency pair successfully – not the news, not the orders, and certainly not the sentiment. Use the traders’ sentiment only to see if there is enough “profit space” for you to take that contrarian trade direction. If 90% of traders are long on EUR-USD, it is hardly going to get higher, do not go into the wall. As the flow in the market is directly managed by external factors, you will primarily benefit from having a system in place that will guide you through any potential volatility caused by news events and the big banks. 

 

Categories
Forex Elliott Wave Forex Market Analysis

GBPUSD Ending Diagonal Completion a Warning Sign for a Trend Reversal?

In our last GBPUSD analysis, we discussed its upward advance in an incomplete ending diagonal pattern. We said that the terminal Elliott wave formation progressed in its fifth wave of Minuette degree identified in blue that belongs to a wave ((c)) of Minute degree labeled in black. Likewise, the wave ((c)) corresponds to the third internal segment of the wave B of Minor degree identified in green. 

Technical Overview

The big picture unveiled the sideways movement in an incomplete corrective formation, which could correspond to an expanding flat pattern. In this regard, after the completion of wave B, the Sterling should start developing wave C, which should lead to a decline of this major pair in a five-wave internal sequence.

On the other hand, the following 8-hour chart reveals the market participants’ sentiment unfolded by the 90-day high and low range, which looks advancing in the extreme bullish sentiment zone. 

The previous chart illustrates the bullish failure in the Wednesday trading session, which couldn’t strike the last high of 1.35394. This failure added to the breakdown of the previous upward trendline plotted in green leads us to expect further declines in the coming trading sessions, likely to the ascending primary trend-line identified in blue.

Short-term Technical Outlook

The intraday Elliott wave view for the GBPUSD pair displayed by the following 2-hour chart exposes the breakdown of the ending diagonal pattern formed on December 07th, confirming the completion of the terminal formation unveiled in the wave ((c)) identified in black. 

Once the Pound found the intraday support at 1.32238, the price action began to bounce in an internal corrective rally subdivided in a three-wave sequence corresponding to wave ((ii)) in black, founding resistance at 1.34779 on the Wednesday trading session.

In this regard, the breakdown of the intraday trend-line that connects the waves ((i)) and (b) should confirm the downward progress of its wave ((iii)) in black, which according to the Elliott wave theory, should be the largest wave of the downward sequence.

The third wave in black could find support in the demand zone between 1.31296 and 1.31064. If the price action continues deteriorating, the Cable could drop toward the next demand zone between 1.29843 and 1.29144.

Summarizing

After the GBPUSD pair made a breakdown of its ending diagonal pattern, is currently moving in a corrective rally corresponding to wave ((ii)), which should give way to a new decline corresponding to the third wave of Minute degree. According to the textbook, this movement should be the largest decline of the current downward sequence and could find support in the demand zone between 1.31296 and 1.31064. Finally, the invalidation level of the current bearish scenario can be found at 1.35394.

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Forex Elliott Wave Forex Market Analysis

EURUSD: is 1.22 at Hand?

The EURUSD pair advances in the extreme bullish sentiment range, consolidating the short-term rally that started on November 04th when the price found fresh buyers at 1.15615.

Technical Overview

The following 8-hour chart shows the short-term participants’ sentiment keeps pushing higher the price action. In this view, the common currency looks to consolidate the pair’s impulsive movement that began in early November.

In this chart, we can see that the current primary trend is clearly bullish. Simultaneously, the accelerated trendline identified with the green line shows the short-term bull market remains intact.

On the other hand, both the intraday sideways channel and the retracement observed in the EMA(60) to Close Index lead to a consolidation of the rally experienced by the common currency during the previous trading sessions.

Therefore, if the price action penetrates below 1.20338, the likelihood of a reversal movement in the EURUSD increases.

Short-term Technical Outlook

The short-term Elliott Wave view for the EURUSD pair unfolded in the next 4-hour chart reveals the advance in an incomplete bullish impulsive wave of Minor degree identified in green.

The EURUSD 4-hour chart illustrates the impulsive rally that began on November 04th when the price found fresh buyers at 1.16025. The price action currently looks to have completed its third wave of Minute degree labeled in black, confirmed by the broadest distance shown on the MACD oscillator

On the other hand, the consolidation structure in progress reveals the potential sideways advance of its fourth wave. Considering the Elliott Wave Principle, the fourth wave shouldn’t penetrate below the invalidation level located at 1.19201, which corresponds to the end of wave ((i)) in black.

Also, considering both the second wave, which looks like a simple corrective pattern, and the alternation principle on corrective waves, the fourth wave should be a complex correction. In this context, the fourth wave could be a triangle or a combination of simple waves grouped in a double-three or a triple-three formation.

Finally, the extension in terms of time should indicate the exhaustion of the bullish pressure; thus, the common currency could soon end its bullish cycle.

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Forex Videos

Forex Forecast – Will We See A Rising Dollar As The Stock Markets Crash?

 


Where next for the US Dollar? 

Thank you for joining this Forex Academy Educational video

The US dollar is the most widely traded currency on the planet.  In terms of volume, the biggest currencies traded against it are the Euro, Japanese Yen, the British pound, Swiss franc, the Australian and New Zealand dollar, and Canadian dollar. 

The dollar is measured as a weighted value against these other currencies and is referred to as the dollar index or DXY. Here we can see that at the time of writing, the value is 91.79, a two-year low.

As we can see here, the dollar has been broadly declining against this basket of currencies since March 2020, when the index hit a high of 103.00, just before the pandemic began to take a grip in the United States.  And with the pandemic still gripping the United States, where just last week 1 million new cases were recorded, could the DXY continue its demise, perhaps down to the 2008 crash level of 72.00? Certainly, some analysts are predicting a slide into the high 80.00’s?

With winter knocking on the door in the United States and pressure mounting on hospitals, the nation’s economy, which has been showing signs of a recovery, albeit at the expense of a lockdown, where President Trump favours the economy over individual’s health, and which might prove a sticking point with the second wave resurgence in motion and a new president in the waiting.

And with US stocks at record highs and with the Dow Jones industrial 30 index somewhat inflated around the 30,000 level, could a short sharp reality check be on the way for the American economy, where the unemployment rate has started to rise in recent weeks? 

If you believe the answer is yes, then us stocks should fall, and in which case we might see the dollar being bought as a safe-haven currency and possibly a rally to the mid 90.00’s.

Another key factor is a failure to pass the new US stimulus bill, which might cause the federal reserve to become more proactive and take an aggressive stance on quantitative easing, which would be negative for the US dollar.  This is unlikely to happen until the January inauguration of the president-elect Joe Biden.

 Another contentious issue which will affect the dollar is the continuation of the Brexit future trade agreement talks with the European Union, which are dragging on but must be concluded shortly if there is to be enough time to implement a new tariff-free trade deal which both parties want, but which seems to be unobtainable because of the lack of agreement on issues such as fisheries and a so-called level playing field, where the EU is concerned that the UK will use its new free trading status to undercut it for trade deals as it goes out to sign up new ones around the world.

 And therefore, any dollar related trading should be done with extreme caution as these issues unfold and where recent swings in pairs such as the GBPUSD, sitting at 1.3315 and EURUSD at 1.1965 at the time of writing, could see significant moves in either direction based on the above metrics. Caution is advised.

 

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Forex Assets

Trading The AUD/TRY Forex Exotic Currency Pair and Analysing The Costs Involved

Introduction

AUD/TRY is an exotic currency pair in the forex market. The AUD is the short form of the Australian Dollar and the TRY for Turkish Lira. Forex traders interested in such exotic pairs should be aware that trading them comes with high volatility compared to trading major forex pairs. In this exotic currency pair, the AUD is the base currency, while the TRY is the quote currency. Thus, the AUD/TRY price represents the amount of TRY that 1 AUD can buy. For instance, if the AUD/TRY pair’s price is 5.8362, it means that 1 AUD can buy 5.8362 TRY.

AUD/TRY Specification

Spread

In the forex market, your broker sells a currency pair to you at a higher price and buys it from you at a lower price. The value difference between these two prices is the spread. It is the primary way in which forex brokers earn their revenue.

The spread for the AUD/TRY pair is – ECN: 3 pips | STP: 8 pips

Fees

Forex traders with ECN account normally pay a trading fee to their broker whenever they open a position. This commission depends on the size of the trade, and not all forex brokers levy it. STP accounts do not have commissions.

Slippage

In forex trading, slippage refers to the price you expect your market order to be filled at and the price at which it is executed. The difference is a result of delays by your forex broker or high volatility.

Trading Range in the AUD/TRY Pair

The trading range refers to the analysis of the price fluctuation of a currency pair across various timeframes. The trading range shows the volatility in pips for a currency pair throughout the trading period ranging from minimum to maximum.

The Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can determine a larger period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

AUD/TRY Cost as a Percentage of the Trading Range

After determining the trading range, we can then determine the trading costs associated with these trading ranges. The total trading cost is expressed as a percentage of the pip volatility. Here are the trading costs for the AUD/TRY pair on both ECN and STP accounts.

ECN Model Account costs

Spread = 3 | Slippage = 2 | Trading fee = 1

Total cost = 6

STP Model Account

Spread = 8 | Slippage = 2 | Trading fee = 0

Total cost = 10

The Ideal Timeframe to Trade  AUD/TRY Pair

From these analyses, we have established that longer timeframes have lower trading costs while the shorter timeframes attract higher trading costs. Note that the highest trading costs coincide with periods of lower volatility.

Therefore, the ideal timeframe to trade the AUD/TRY pair would be on longer timeframes when volatility is the highest. For shorter-term traders, opening positions when volatility is above the average can potentially lower the trading costs. Furthermore, traders across all timeframes can lower their trading costs by using the forex limit order types. With these types of orders, the cost of slippage is removed.

Below is an example using the ECN account.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee

= 0 + 3 + 1 = 4

Using the forex limit order types has lowered the trading costs across all timeframes. You can notice that the highest cost has reduced from 101.69% to 67.8%.

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Forex Assets

How Best To Trade The ‘CHF/AUD’ Forex Currency Pair?

Introduction

CHF/AUD is the acronym for the Swiss Franc against the Australian Dollar, and it is an exotic Forex currency pair. Here, the CHF is the base currency, and the AUD is the quote currency. Both CHF and AUD are major currencies and are vastly traded in the foreign exchange market. CHF is the official currency of Switzerland, while AUD is the national currency of Australia.

Understanding CHF/AUD

The price of this pair in the trade market defines the value of AUD equivalent to one Swiss Franc. It is quoted as 1 CHF per X AUD. For instance, if the value of this pair is 1.5318, these many Australian Dollars are required to acquire one CHF. 

Spread

The difference between the ask-bid price is referred to as Spread, which is charged by the broker. This value is different in the ECN and STP accounts. The estimated Spreads for CHF/AUD pair is given below.

ECN: 17 pips | STP: 22 pips

Fees & Slippage

A fee is a price that one pays for the trade. There are zero fees charged on STP accounts, but a few pips are charged on ECN accounts. Slippage is the difference calculated between the price by the trader and the price the trader received from the broker.

Trading Range in CHF/AUD

The trading range is represented in the tabular format to showcase the pip movement of a currency pair in various timeframes. These values are useful in ascertaining the profit that can be generated from trade in advance. To discover the trading costs, we must multiply the below volatility value with the pip value of this pair.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

CHF/AUD Cost as a Percent of the Trading Range

The trading range is obtained by identifying the ratio between total cost and volatility; it expressed in terms of percentage. Below is the representation of the cost differences of traders in various timeframes and volatilities.

ECN Model Account

Spread = 17 | Slippage = 5 |Trading fee = 8

Total cost = Slippage + Spread + Trading Fee = 5 + 17 + 8 = 30

STP Model Account

Spread = 22 | Slippage = 5 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 5 + 22 + 0 = 27

Trading the CHF/AUD

When the percentage value is higher, the cost of the trade gets more expensive. From the above tables, we can conclude the values are significant in the min column and relatively less significant in the max column. It means that the costs are high when the market’s volatility is low. It is not advisable to trade when both the volatility and cost of trading is high. Balancing both these factors is ideal to trade when the pair’s volatility is in the range of the average values.

Additionally, to lower your costs even further, you can place trades using limit orders instead of market orders. By executing limit orders, the slippage will not be involved in the calculation of the total costs. And this will set the cost of the trades low by a decent number. An example of the same is given below.

STP Model Account (Using Limit Orders)

Spread = 22 | Slippage = 0 |Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 0 + 22 + 0 = 22

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Forex Market Analysis

Daily F.X. Analysis, June 9 – Top Trade Setups In Forex – European GDP in Highlights! 

On the news front, the Eurozone is due to release series of high impact events that may drive movements in the Euro related currency pairs. The events like trade balance, GDP, and final employment change will be in the highlights.

Economic Events to Watch Today

 

 


EUR/USD – Daily Analysis

The EUR/US prices were closed at 1.12937 after placing a high of 1.3196 and a low of 1.12680. Overall the movement of the EUR/USD pair remained flat throughout the day.

On Monday, the President of the European Central Bank, Christine Lagarde, said that the central bank’s measure to fight the coronavirus crisis was proportionate to the severe risks facing its mandate.

Lagarde said during a hearing at the Committee on economic and monetary affairs of the European Parliament, which was conducted via video conference, that the crisis-related measures were temporary, targeted, and proportionate.

On Thursday in its monetary policy decision, ECB announced an additional 600 billion euros in its pandemic emergency purchase program (PEPP) and scaled up its previous 750 billion Euro, to extend the program till mid-2021.

According to Lagarde, ECB continuously monitors the proportionality of its instruments, and she said that the net effects to be gained by PEPP expansion were overwhelmingly positive. The need for expansion was to avoid any deeper recession and quickening the pathway towards normalization.

When asked about the German court ruling of the ECB’s massive public sector purchase program, she said she was confident that a solution could be found because it was addressed to the German federal government and the German Parliament.

On the data front, at 11:00 GMT, the German Industrial Production showed a decline of 17.9% in April against the expectations of 16% and weighed on shared currency euro. AT 13:30 GMT, the Sentix Investor Confidence from the Eurozone for June decline to 24.8 from the expected reduction of 22.0 and weighed on Euro.

The depressed Euro after inferior to expected German Industrial Production dragged the pair EUR/USD with itself to the low of 1.12680.

Meanwhile, Lagarde’s Speech explaining the benefits of ECB’s latest expansion in PEPP provided strength to Euro, which pushed the EUR/USD pair higher.

Lagarde’s Speech and economic data from Eurozone moved in the opposite direction, and hence, the pair EUR/USD remained flat throughout the day as it closed at the same level it was started with. No data was to be released from the American side, so the pair followed Euro’s directions.

Daily Support and Resistance

  • R3 1.1357
  • R2 1.1338
  • R1 1.1327

Pivot Point 1.1308

  • S1 1.1296
  • S2 1.1278
  • S3 1.1266

EUR/USD– Trading Tip

The EUR/USD is consolidating in a narrow trading range of 1.1370 – 1.1276 level, and right now, it seems to break out of this trading range. On the lower side, the next target level seems to be 1.1185. Currently, the pair is facing immediate support around 1.1274 level, and closing of candles below this level may lead the EUR/USD prices further lower towards 1.1185 level, which is extended by the 50 EMA level. On the higher side, resistance holds at 1.1315 level today. Odds of bearish bias remains solid today.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.27235 after placing a high of 1.27358 and a low of 1.26278. Overall the movement of GBP/USD remained bullish throughout the day. The broad-based U.S. dollar selling bias after the positive tone around greenback followed by Friday’s job report vanished pushed the pair GBP/USD higher on Monday. The currency pair GBP/USD raised for the 8th consecutive day on Monday and continued its bullish rally.

The weakness of the U.S. dollar was attributed to weak U.S. yields. The U.S. dollar index (DXY) turned negative on the day and fell back to below 97.00 level. The U.S. stock was high on the back of increased risk appetite.

On the other hand, the E.U. chief negotiator, Michel Barnier, was supposed to present a compromise proposal on access to British waters during the latest round of talks, but at the last minute, he was blocked to present the proposal by its member states with large fishing communities.

E.U. now expects the talks to drag into October, but the U.K. has ruled it out and said that it was unacceptable. E.U. wanted to intensify and accelerate its work to make progress with the negotiations, and the U.K. need to prepare its businesses for a new trading environment.

On the fishing issue, the E.U. wants the U.K. to follow the structures of standard fisheries policy (CFP) from the end of 2020. But British fishing communities claim that the policy left the U.K. with far too few fish to catch, so they want to be an independent coastal state from the end of 2020. On the data front, there was no macroeconomic data to be released from both sides so, the pair continued following its previous day’s trend and posted gains on the back of the risk-on market sentiment.

Daily Support and Resistance

  • R3 1.28
  • R2 1.2765
  • R1 1.2742

Pivot Point 1.2707

  • S1 1.2684
  • S2 1.2649
  • S3 1.2627

GBP/USD– Trading Tip

The GBP/USD’s overall trend is bullish as the pair continues to reach 1.2690 levels, having violated the triple top level on the 4-hour timeframe. The pair is retracing a bit; perhaps, investors are doing some profit-taking before taking any additional buying position in Sterling. Bullish trend continuation leads to GBP/USD prices towards the next resistance level of 1.2760 level. Above this, the next resistance holds around 1.2795 level. Conversely, the support is likely to be found around 1.2665 and 1.2601 level today. Let’s look for selling below 1.2707 and buying above this level today. 


USD/JPY – Daily Analysis

 The USD/JPY pair was closed at 108.426 after placing a high of 109.691 and a low of 108.232. Overall the movement of the USD/JPY pair remained strongly bearish throughout the day. The pair USD/JPY posted a steeper loss on Monday amid the broad-based U.S. dollar weakness and improved Japanese economic outlook. The pair dropped on Monday after posting gains for the previous four consecutive days.

On the data front, at 4:50 GMT, the Bank Lending for the year from Japan increased to 4.8% in May from 2.9% in April. The Final GDP for the quarter decreased by 0.6% against the expected decline of 0.5% and weighed on Yen. At 4:52 GMT, the Current Account Balance for April came short of expectations of 0.33T as 0.25T and weighed on Japanese Yen. The Final GDP Price Index for the year came in line with the expectations if 0.9%. At 10:02 GMT, the Economy Watchers Sentiment, however, came in favor of Japanese Yen as 15.5 against the expected 12.6.

The preliminary reading of Japan’s Q1 GDP moved from -0.9% to -0.6% and came in better, which indicated the readiness of Japanese policymakers with extra stimulus if needed to fight against the pandemic.

Moreover, the better outlook of Japan’s current economic condition supported the Japanese Yen on Monday and weighed on the USD/JPY pair.

On the other hand, despite upbeat economic data from the U.S., the greenback lost its demand due to the drop in risk barometer that day. The rush of traders’ return from riskier assets weighed on the U.S. dollar and made it weak. 

Daily Support and Resistance    

  • R3 110.81
  • R2 110.25
  • R1 109.34

Pivot Point 108.79

  • S1 107.88
  • S2 107.33
  • S3 106.42

USD/JPY – Trading Tips

The USD/JPY fell dramatically to violate the narrow trading range of 109.800 – 109.255, and now it’s trading somewhere around 107.900. On the 4 hour timeframe, the USD/JPY is likely to find support at 107.900, and below this, the upward trendline may extend support around 107.600 level. The Japanese currency pair has already crossed below 50 EMA, favoring selling bias in the pair today. Let’s consider taking selling trades below 108.50 today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, June 8 – Top Trade Setups In Forex – Dollar Strengthens Over NFP! 

On the news front, the eyes will remain on the German Industrial Production m/m and ECB President Lagarde Speaks. Both of these may have an impact on the Euro related currency pairs.

Economic Events to Watch Today

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12911 after placing a high of 1.13835 and a low of 1.12781. Overall the movement of EUR/USD remained bearish throughout the day. The EUR/USD pair rose to 1.13835 near 13-weeks highest level but failed to remain there and broke its nine days bullish streak and fell on Friday amid U.S. dollar strength across the board after the release of US Non-Farm Employment Change.

The pair EUR/USD was on bullish track after the announcement of an additional 600 billion euros in the emergency package from the European Central Bank on Thursday. The package was announced to cover up the losses faced after the coronavirus induced lockdowns across the globe and its impact on the global economy.

The additional 600 billion euros by ECB in its pandemic emergency purchase program (PEPP) made the total size of aid provided after the coronavirus crisis to 1.35 trillion euros. ECB also said that the updated forecast about GDP showed a contraction of 8.7% this year, and the inflation expectations were to rise by 0.3% this year and 0.8% in next year. EUR/USD moved in an upward direction after the ECB’s PEPP announcement and continued to follow the trend in early sessions on Friday and rose above 13-weeks higher level.

However, after the release of US Non-Farm Employment Change, the pair EUR/USD started to move in the opposite direction at the ending day of the week. At 17:30 GMT, the Non-Farm Employment Change from the United States showed that 2.509M people were hired in May against 7.750M of job loss expectations. A stronger than expected job report from the U.S. gave strength to the U.S. dollar across the board and weighed on EUR/SD pair.

Adding in the strength on the U.S. dollar was the Unemployment Rate, which came in as 13.3% against the expectations of 19.4% and further dragged down the pair EUR/USD pair.

On the other hand, from the Europe side, at 11:00 GMT, the German Factory Orders for April were also released which showed that factory orders were reduced by 25.8% in April against the expected drop of 20% and weighed on Euro which ultimately dragged the pair in a downward trend.

Daily Support and Resistance

  • R3 1.1357
  • R2 1.1338
  • R1 1.1327

Pivot Point 1.1308

  • S1 1.1296
  • S2 1.1278
  • S3 1.1266

EUR/USD– Trading Tip

The EUR/USD is also following a bearish trend on the back of a stronger dollar. Currently, the pair is facing immediate support around 1.1284 level, and closing of candles below this level may lead the EUR/USD prices further lower towards 1.1244 level, the support, which is extended by the 50 EMA level. On the higher side, resistance holds at 1.1315 level today. Odds of bearish bias remains solid today.


GBP/USD – Daily Analysis

The GBP/USD was closed at 1.26689 after placing a high of 1.26901 and a low of 1.25828. Overall the movement of GBP/USD pair remained bullish throughout the day. The pound rose for 7th consecutive day on Friday amid the rising hopes for a deal between E.U. & U.K. but lost some of its daily gains after the release of U.S. on-Farm Employment Change.

Matt Hancock, the Cabinet Minister of the U.K., said that a trade deal with the E.U. was still possible on very reasonable demands. In the latest rounds, both sides admitted that a little progress was made, and they were very hopeful that no-deal outcomes to the talks could be avoided.

The U.K. & E.U. differences have remained under four key points of fisheries: competition rules, governance, and police cooperation. UK PM Boris Johnson and President of European Commission, Ursula von der Leyen, are expected to meet later this month.

The U.K. has only until the end of June to apply for the extension of the transition period, but Johnson has ruled it out. However, the hopes that U.K. & E.U. will reach a deal after the described little progress in talks from both sides increased, and hence, the pair GBP/USD found traction in the market.

Whereas, the investors think that chances for no-deal Brexit were more than ever because the coronavirus pandemic will lead to one of the worst recessions in modern history, and investors think that hardcore Brexiteers will use the recession as a perfect distraction to get to a no-deal Brexit done.

On the data front, at 12:30 GMT, the Halifax Housing Price Index for May from the United Kingdom was declined by 0.2% against the expected decline of 0.7% and supported British Pound which ultimately pushed the GBP/USD pair on bullish track on Friday and added in the pair gains.

Meanwhile, the U.S. dollar strength after the release of US Non-Farm Employment Change exerted pressure on the rising prices of GBP/USD pair on Friday and made it lose some of its daily gains.

Daily Support and Resistance

  • R3 1.28
  • R2 1.2765
  • R1 1.2742

Pivot Point 1.2707

  • S1 1.2684
  • S2 1.2649
  • S3 1.2627

GBP/USD– Trading Tip

On Monday, the technical side of the GBP/USD seems bullish as the pair continues to reach 1.2690 levels, having violated the triple top level on the 4-hour timeframe. The GBP/USD pair has formed an upward regression trend channel, and it’s driving further buying trend in the Cable. Bullish Continuation of a bullish trend can lead to GBP/USD prices towards the next resistance level of 1.2760 level. Above this, the next resistance holds around 1.2795 level. Conversely, the support is likely to be found around 1.2665 and 1.2601 level today. Let’s look for selling below 1.2707 and buying above this level today


USD/JPY – Daily Analysis

The USD/JPY was closed at 109.573 after placing a high of 109.848 and a low of 109.042. Overall the movement of USD/JPY remained bullish throughout the day. The USD/JPY pair surged for the fourth consecutive day on Friday and gained some strong follow-through traction after the release of surprisingly stronger than expected U.S. monthly jobs data. The headline data of Friday, NFP, showed that 2.509M jobs were added in May, whereas the forecast was about 8M job loss.

Adding in the optimism was the unemployment rate, which beat the market expectations and was reported as 13.7% against 19.4% of expectations. Better than expected, data from the U.S. economy raised the bars for recent optimism over the sharp V-shaped recovery for global economic recovery. This increased the already stronger risk appetite In the market and hence, the USD/JPY pair gained for the 4th consecutive day on Friday.

At 4:30 GMT, the Household Spending for the year from Japan was declined by 11.1% against the expected decline of 12.8% and supported the Japanese Yen. At 10:00 GMT, the Leading Indicators from Japan remained flat with the expectations of 76.2%.

From the American side, the Average Hourly Earnings in May was declined by 1.0%, whereas it was expected to rise by 1.0%. The US Non-Farm Employment Change showed that 2.509M people were hired back in May, which were expected to show job loss of 7.750M people. The Unemployment Rate in April fell short of 19.4% expectations and came in as 13.3% and supported the U.S. dollar.

Daily Support and Resistance    

  • R3 109.79
  • R2 109.74
  • R1 109.67

Pivot Point 109.62

  • S1 109.56
  • S2 109.5
  • S3 109.44

USD/JPY – Trading Tips

The USD/JPY is consolidating in a narrow trading range of 109.800 – 109.255. The stronger than expected NFP figures drove buying in the USD/JPY pair on Friday, but now the traders seem to capture retracement in the market. A bearish breakout of 109.280 level can drive selling until the next support level of 109, which marks 38.2% Fibonacci retracement. The 50 EMA and MACD both are supporting the buying trend in the USD/JPY pair, and it can lead the USD/JPY prices further higher today. On the higher side, the resistance holds around 109.850. Let’s wait for a breakout of 109.800 – 109.255 to determine further trends in the USD/JPY pair. All the best for today! 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, June 01 – Top Trade Setups In Forex – ISM Manufacturing PMI In Highlights

On Monday, the fundamentals side is likely to drive no major movement during the European session. Still, the U.S. session may offer some price action on the release of ISM manufacturing PMI figures today.

Economic Events to Watch Today

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.11032 after placing a high of 1.11450 and a low of 1.10676. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD continued its previous trend and finally crossed above 1.11 level on Friday and rose for the 5th consecutive day this week. The pair showed the longest run since late March at the end of this week on the back of Euro’s strength.

At 11:00 GMT, the German Import Prices for April were released as -1.8% against the -1.5% forecasted and weighed on Euro. The German Retail Sales dropped less than expected 12% as5.3% in April and supported single currency Euro. At 11:45 GMT, the French Consumer Spending for April was declined by 20.2% against the forecasted 14.5% and weighed on Euro. The French Prelim CPI for May dropped by0.05 from the expected drop of 0.1% and weighed on Euro.

However, the French Prelim GDP for the quarter dropped less than the expectations of 5.8% decline and came in as 5.3% and supported shared currency Euro. At 13:00GMT, the M3 Money Supply for the whole bloc surged to 8.3% from the forecasted 8.1% and supported Euro.

The Private Loans from the whole bloc for the year dropped to 3.0%from the forecasted 3.5%. At 14:00 GMT, the CPI Flash estimate for the year for the whole Eurozone came in line with the expectations of 0.1%.  

However, the Core CLPI Flash estimate of the whole bloc for the year increased to 0.9% from the expected 08% and supported Euro. The Italian CPI for May came in line with the expectations of -0.1%.

Better than expected GDP and CPI data from Eurozone gave strength to the Euro against the U.S. dollar and supported the upward trend of EUR/USD pair on Friday.

On the other hand, the United States’ economic data was gloomy and weighed on the U.S. dollar, which added in the upward movement of EUR/USD pair. At 17:30 GMT, the Core PCE Price Index for April was dropped more than the expected -0.3% as -0.4% and weighed on the U.S. dollar. Personal Spending also declined more than expectations of 12.6% decline as 13.6% in April and weighed on the U.S. dollar. The Goods Trade Balance for April showed a deficit of 69.7B against the forecasted deficit of 64.8B and weighed on the U.S. dollar. The Prelim Wholesale Inventories for April surged to 0.4% from the expected -0.5% and added in U.S. dollar weakness.

The Chicago PMI at 18:45 GMT came in as 32.3 points against 40.1 of expectations and weighed the U.S. dollar. The Revised Consumer Sentiment from the University of Michigan for May dropped to 72.3 from the expected 73.7 and weighed on the U.S. dollar. The Revised Inflation Expectations from the University of Michigan for May were reported as 3.2% from the previous 3.0%.


Daily Support and Resistance

  • R3 1.1158
  • R2 1.1141
  • R1 1.1129

Pivot Point 1.1113

  • S1 1.1101
  • S2 1.1085
  • S3 1.1073

EUR/USD– Trading Tip

The bullish bias of the EUR/USD continues to prevail in the market as the EUR/USD is heading north towards the next target level of 1.1150 level. A bullish breakout of 1.1150 level may lead the pair towards 1.1220 level today while support holds around 1.1080 level. Bullish bias seems dominant today. Consider taking buying trades over 1.1140 level to target 1.1199. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.23459 after placing a high of1.23940 and a low of 1.22902. Overall the movement of GBP/USD pair remained bullish throughout the day. The pair GBP/USD reached above its two-week high level on Friday near 1.2400 level but could not stay there and dropped back to 1.2300 level. The drop in sterling was caused by the awaiting speech of U.S. President Donald Trump.

Sterling started its day on firm tone and extended its previous day’s gains on the back of broad-based U.S. dollar weakness due to poor than expected U.S. economic data release. The decline in U.S. Treasury bond yields also added to the fault of the U.S. dollar. The Chicago PMI for May dropped to 32.3 from the expected 40.1 and weighed on the U.S. dollar. The Revised Consumer Sentiment from the University of Michigan for May also dropped to 72.3 against the expected 73.7 and added negative pressure on USD.

Other than economic data, the comments from Fed Chair Jerome Powell also exerted pressure on the U.S. dollar. Powell said that the U.S. economy had crossed many red lines that had never crossed before. He also stated that the Fed was launching Main Street Lending Program, which had not used since the Great Depression. After these comments, the GBP/USD pair started to move upward.

Investors became cautious before U.S. President Donald Trump’s speech on Friday and started selling Sterling, who made the pair lose its early daily gains. However, after his speech, the pair continued its bullish trend and ended its day with a bullish candle. The heat between China and the United States was enhanced after the strong response from U.S. President Donald Trump over the new security bill in Hong Kong by China, which was highly awaited as Trump had announced it before earlier this week.

Daily Support and Resistance

  • R3 1.2388
  • R2 1.2371
  • R1 1.2358

Pivot Point 1.2341

  • S1 1.2328
  • S2 1.2311
  • S3 1.2298

GBP/USD– Trading Tip

The GBP/USD continues trading bullish as it has violated the double top resistance area around 1.2364 level. Bullish crossover of this level is now likely to extend the buying trend until 1.2458, but on the way, the upward channel’s upward trendline is likely to provide resistance around 1.2410, while the support level stays at 1.2370 today. 

On the 4-hour timeframe, the 50 EMA is suggesting bullish bias, and now the MACD is suggesting buying trend in the GBP/USD pair as the histograms are forming above zero levels. Consider taking buying trades over 1.2370 and selling below the same level today.


USD/JPY – Daily Analysis

The USD/JPY was closed at 107.767 after placing a high of 107.894 and a low of 107.077. Overall the movement of USD/JPY remained bullish throughout the day. At 4:30 GMT, the Tokyo Core CPI for the year came in as 0.2% against -0.2% and supported the Japanese Yen. The Unemployment Rate from Japan also decreased in April to2.6% from the expectations of 2.7% and supported Yen.

However, the Prelim Industrial Production for April dropped by 9.1% against the expected drop of 5.5% and weighed on Yen at 4:50 GMT. The Retail Sales for the year from Japan also dropped by 13.7% against the expected drop of 11.2% and weighed on Yen. At 10:00 GMT, the Housing Starts for the year dropped by 12.9% against the drop of 12% expected and weighed on Yen. At 10:02 GMT, the Consumer Confidence for April increased to 24.0 from the expected 213 and supported Yen.

The increased confidence in Japan’s economy and better than expected CPI and Unemployment Rate supported Yen and made it stronger against the U.S. dollar, which dragged the USD/JPY currency pair in earlier Asian trading session on Friday.

 The pair dropped to its two weeks lowest level on Friday at 107.077 on the back of increased demand for safe-haven Yen amid escalating tensions between the U.S. and China. On Friday, the President of the United States, Donald Trump announced to revoke its relationship with WHO due to its mishandling of coronavirus pandemic. The U.S. had warned the WHO to be independent of China, change its reforms, and give it 30 days to do so. However, when on Friday, 30 days ended, and no response came back from WHO, the U.S. declared to end its relationship with it.

Trump said that the U.S.’s funds to transfer to WHO will be given to more deserving other nations where urgent help will be required. The decision came in after China issued and passed a new security bill on Hong Kong, and the U.S. said that it would retaliate.

Categories
Forex Market Analysis

Daily F.X. Analysis, May 29 – Top Trade Setups In Forex – Fed Chair Powell Speech in Focus! 

The European Commission will post May CPI (+0.1% on-year expected). The European Central Bank will publish the eurozone’s M3 money supply in April (+8.2% on-year expected). The German Federal Statistical Office will report April retail sales (-12.0% on month expected). France’s INSEE will release final readings of 1Q GDP (-5.4% on year expected) and May CPI (+0.3% on-year expected). The U.S. Commerce Department will post April wholesale inventories (-0.7% on month expected), advance goods trade balance (65 billion dollars deficit expected), personal spending (-12.8% on month expected), and personal income (-6.0% on month expected). The Market News International will release May Chicago PMI (40.0 expected). The University of Michigan will report its final data of the May Consumer Sentiment Index (74.0 expected).

Economic Events to Watch Today

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.10771 after placing a high of 1.10934 and a low of 1.09915. Overall the movement of the EUR/USD pair remained bullish throughout the day.

The EUR/USD pair continued its bullish streak for the 4th consecutive day on Thursday and rose near 1.1100level, highest since March 30. On Wednesday, the European Commission proposed an additional $18.2Billion for the European Union’s foreign spending as part of its COVID-19 recovery package. The proposed package gave relief to NGOs that had feared further rate cuts.

This proposal by the European Commission must be approved by E.U. states and would allocate 86 billion euros to the bloc’s development for 2021-2027. The additional resources would be drawn from the 750 billion euro recovery fund, which was also announced on Wednesday, which will be raised by borrowing on financial markets.

On the data front, the German Preliminary Consumer Price Index for May declined by -0.1% against the expected 0.1% and weighed on single currency Euro. While at 12:00 GMT, the Spanish Flash Consumer Price Index for the year came in line with the expectations of -1.0%.

The European Commission indicated that the Consumer Confidence Index in Eurozone edged higher to -18.8 from -22. Still, the Business Climate Index fell to -2.43 from -1.99 and stopped the shared currency from gathering strength against its rivals.

However, the risk-on market sentiment of the market continued to support the EUR/USD pair and weighing on the U.S. dollar. The potential coronavirus vaccines, reopening of economies across the globe, and potential risk for the second wave of corona kept the risk appetite in the market and continued weighing on the U.S. dollar. The weakness of the U.S. dollar gave a push to EUR/USD pair.

On American economic docket, the poor than expected data also kept the U.S. dollar under pressure on Thursday. The jobless claims from the United States for last week rose to 2.123M from the expected 2.1M and weighed on the U.S. dollar. At 19:00 GMT, the Pending Home Sales for April dropped more than expectations and weighed on the U.S. dollar. The actual figure came in as -21.8% against the expected -15%. The closely watched Prelim GDP for the quarter from the United States also weighed on the U.S. dollar when it was released as -5.0% against the expected -4.8%. The EUR/USD pair rose to its 12 weeks highest level on the back of broad-based U.S. dollar weakness on Thursday.

Daily Support and Resistance

  • R3 1.122
  • R2 1.1157
  • R1 1.1117

Pivot Point 1.1054

  • S1 1.1014
  • S2 1.0951
  • S3 1.0911

EUR/USD– Trading Tip

The bullish bias of the EUR/USD continues to prevail in the market as the EUR/USD is heading north towards the next target level of 1.1150 level. The pair have already violated the triple top resistance level of 1.09985, and bullish crossover of 1.1146 level may lead the EUR/USD prices further higher towards 1.12118 level. The closing of three white soldiers in the daily timeframe is also supporting an upward trend in the market.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.23222 after placing a high of 1.23443 and a low of 1.22336. Overall the movement of GBP/USD pair remained bullish throughout the day.

According to the policymaker of Bank of England, Michael Saunders, easing too much rather than easing a little by Bank of England was easier in response to the coronavirus pandemic. He said that the U.K. was at risk of relatively slow recovery than other countries from the coronavirus crisis, and it could prove damaging to the U.K.’s economy.

On Thursday, Saunders added that if Bank of England failed to add more stimulus measures in the economy, than it could slip the economy into an “inflation trap.” Saunders was one of two policymakers of BoE that wanted an expansion inn asset purchases in May. While the other majority wanted to wait, though accepted, more stimulus would be required.

The first speech of Saunders after COVID-19 was encouraging the central bank to cut interest rates to a record low of 0.1%, increase the bond-buying, and boost the capital. However, in response to his speech, British Pound came under pressure on Thursday and fell by 0.2%. On the other hand, the U.S. dollar also remained weak during the day because of risk-on market sentiment along with the poor economic data. The broad-based U.S. dollar weakness overshadowed the drop in GBP and raised the GBP/USD pair.

The closely watched Prelim GDP for the second quarter from the United States was dropped by -5.90% against the expected drop by -4.8% and weighed on the U.S. dollar. At 17:30 GMT, the Unemployment Claims from last weeks also reported higher than expectations of 2100K as 2123K and weighed on the U.S. dollar. At 19:00 GMT, the Pending Home Sales for April also declined by 21.8% against the expected decline by 15%.

Despite reopening all 50 states from coronavirus induced lockdowns, unemployment claims still showed higher than expected figures, which resulted in the broad-based U.S. dollar weakness on Thursday.

On Brexit front, the final round of talks between the U.K. & E.U. before a summit in June will be held next week. Because of the last negotiations that went bad after the exchange of letters between the British negotiator, David Frost, and his E.U. counterpart, Michel Barnier, the hopes for the success of final round talks have decreased. This has raised the bars for no-deal Brexit possibility.

U.K. Prime Minister, Boris Johnson will travel to Brussels for talks with European leaders next month to attempt to revive the negotiations. The two sides were still far apart on fisheries, and the U.K. has said that it would abandon the talks if “shape of a deal” has not emerged by the end of June. The U.K. traders will keep an eye onus data and Brexit updates for further actions.

Daily Support and Resistance

  • R3 1.259
  • R2 1.2477
  • R1 1.2405

Pivot Point 1.2292

  • S1 1.222
  • S2 1.2107
  • S3 1.2035

GBP/USD– Trading Tip

On Friday, the GBP/USD is trading with a slightly bullish bias, facing a double top resistance area around 1.2364 level. Bullish crossover of this level may extend the buying trend until 1.2458. On the 4-hour timeframe, the 50 EMA is suggesting bullish bias, and now the MACD is suggesting buying trend in the GBP/USD pair as the histograms are forming above zero levels. 

Today, the Sterling may find immediate support around 1.2245 levels along with resistance at 1.2360 while the closing of candles above the 1.2360 level may drive buying until 1.2450 level. The violation of support is likely to push the cable further lower until 1.2160 level. Consider taking buying trades over 1.2162 and selling below the same level today.


USD/JPY – Daily Analysis

The USD/JPY currency pair extended its previous 2-days winning streak. They rose to 107.90 marks mainly due to the risk-on market sentiment, which undermined the Japanese yen’s safe-haven demand and exerted some bullish impact on the currency pair. On the other hand, the broad-based U.S. dollar weakness turned out to be one of the main factors that kept a lid on any additional gains in the pair. At this particular time, the USD/JPY currency pair is currently trading at 107.83 and consolidating in the range between 107.69 and 107.91.

However, the reason for the upbeat market sentiment could be attributed to the recent optimism about a possible COVID-19 vaccine and hopes of a global economic recovery, which eventually sent the currency pair higher.

Despite the bullish trend in the currency pair, the USD/JPY pair held well within a near two-week-old trading range. The reason behind the confined trading range could be the escalating tensions between the U.S. and China relations, which kept investors cautious about placing any strong position.

The intensifying tension between the United States and China was further bolstered by the U.S. Secretary of State Mike Pompeo’s statement in which he denied Hong Kong’s special status and said that it was no longer autonomous from China. 

At the USD front, the broad-based U.S. dollar erased its previous day gains and slipped 0.16% to 98.900 on the day due to the rise in Asian shares and U.S. stock futures, which eventually limited the additional gains in the pair. Whereas, The U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped 0.16% to 98.900 by 11:26 AM ET (4:26 GMT). 

Daily Support and Resistance    

  • R3 108.39
  • R2 108.16
  • R1 107.86

Pivot Point 107.63

  • S1 107.33
  • S2 107.1
  • S3 106.79

USD/JPY – Trading Tips

The safe-haven Japanese yen continues to gain bullish momentum in the wake of increased safe-haven appeal for JPY, and it’s dragging the USD/JPY pair lower at 107.120. The odds of selling in pair remains strong as the pair is likely to drop towards the next support level of 106.850. The recent strong selling candle also suggests odds of further selling in the USD/JPY pair today. 

All the best for today! 

Categories
Forex Assets

Trading The AUD/DKK Forex Pair & Analyzing The Trading Costs Involved

Introduction

The abbreviation of AUD/DKK is the Australian Dollar paired with the Danish Krone. Here, AUD is the official currency of Australia and many others like Christmas Island and Norfolk Island. AUD is also to be the fifth most traded currency in the Forex market. In contrast, DKK stands for the Danish Krone, and it is the currency of Denmark, Greenland, and the Faroe Islands.

Understanding AUD/DKK

In AUD/DKK currency pairs, the first currency(AUD) is the base currency, and the second currency(DKK) is the quote currency. In the foreign exchange market, when we sell a currency pair, we always sell the base currency and simultaneously buy the quote currency and vice versa. Here, the market value of AUD/DKK helps us to understand the strength of DKK against the AUD. So if the exchange rate for the pair AUD/DKK is 4.4625, it means we need 4.4625 DKK to buy 1 AUD.

Spread

Forex brokers have two prices for currency pairs: the bid and ask price. The bid price is the price in which we sell an asset, and ask is the price at which we buy it. The difference between the ask and the bid price is called the spread. Below are the spread values for the AUD/DKK Forex pair.

ECN: 20 pips | STP: 23 pips

Fees

A Fee is the charges that we traders pay to the broker for opening a trade. This fee depends on the type of broker (STP/ECN) we use.

Slippage

When we want to execute a trade at a particular price, but instead, if the trade gets executed at a different price, we call that difference as Slippage. The Slippage can take place at any time, but mostly we can counter a volatile market.

Trading Range in AUD/DKK

As a trader, our main motive should be to avoid losses and risks. The trading range here will determine the amount of money we will win or lose in a given amount of time. ATR is a technical indicator that indicates the price movement in a currency pair. In the below table, we have the representation of the minimum, average, and maximum pip movement in a currency pair. We will evaluate it merely by using the ATR indicator combined with 200-period SMA.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a significant period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

AUD/DKK Cost as a Percent of the Trading Range

The cost of trade depends on the broker type and varies based on the volatility of the market. The total cost of trade involves spread, fees, and sometimes Slippage if the volatility is more.

ECN Model Account

Spread = 20 | Slippage = 3 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 3 + 20 + 5 = 28 

STP Model Account

Spread = 23| Slippage = 3 | Trading fee = 0

Total cost = Spread + Slippage + Trading Fee = 23 + 3 + 0 = 26

Trading the AUD/DKK

AUD/DKK is an exotic currency pair that less traded in the forex exchange market. The average pip movement in 1hr is 183, which shows the volatility is very high.

Note, The higher the volatility, the higher is the risk and lower is the cost of the trade and vice versa. Taking an example, we can see from the trading range when the pip movement is more, the cost is low, and when the pip movement is low, the cost is high.

Trading using LIMIT ORDERS

To reduce our costs of trade, we can place the trades using limit orders instead of market orders. In doing so, we can eliminate the Slippage that will help reduce the overall cost of the trade. An example of a Limit order is given below.

Spread = 20 | Slippage = 0 |Trading fee = 5

Total cost = Slippage + Spread + Trading Fee = 0 + 20 + 5 = 25

Categories
Forex Market Analysis

Daily F.X. Analysis, May 27 – Top Trade Setups In Forex – ECB President Lagarde Speaks! 

The U.S. dollar, which behaves like a safe-haven asset during political uncertainty & market turmoil, rose to a one-week high against the basket of 6 currencies, but it started to erase its daily gains in late London Session. Tensions between U.S. &China have increased since the coronavirus outbreak, over which both countries have exchanged accusations of cover-ups and lack of transparency with the world. The signs for easing tensions between the two biggest economies of the world are decreasing day by day and have created an uncertain environment in the market weighing on the market.

Economic Events to Watch Today

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.09821 after placing a high of 1.09956 and a low of 1.08913. Overall the movement of EUR/USD remained bullish throughout the day. On Tuesday, EUR/USD prices surged and recovered its previous three days’ losses and regained strength in the market on the back of the renewed risk-on market sentiment. The risk appetite after easing of lockdown throughout the world gave strength to the riskier assets like EUR/USD pair and rose them across the board.

The rising hopes for potential coronavirus vaccine added in the risk sentiment and increased expectations for a quick economic recovery. A bid pharmaceutical company, which was the first to make the Ebola vaccine revealed its plans on Tuesday and said that it was working on two potential vaccines and one drug to cure the virus’s infection. The CEO of the company was cautious that it might take a long time to deliver vaccines across the globe.

This raised optimism around the market and raised the bars for riskier assets and moved EUR/USD pairs to recover its previous day’s losses.

On the other hand, in the economic docket, EUR found extra support after the German Consumer Climate from Gfk came in as -18.9 against the expectations of -19.1.

Furthermore, the European Central Bank said that the coronavirus pandemic had amplified the existing vulnerabilities of the financial sector, which will make Eurozone banks face significant losses.

ECB reported that the pandemic had caused one of the sharpest economic contraction in recent history. Still, a wide range of policy measures has been proved helpful in averting a financial meltdown.

Daily Support and Resistance

  • R3 1.1126
  • R2 1.1061
  • R1 1.1021

Pivot Point 1.0956

  • S1 1.0915
  • S2 1.0851
  • S3 1.081

EUR/USD– Trading Tip

On the 4 hour timeframe, the EUR/USD pair is testing triple top level, which is providing resistance around 1.0995 level. Closing of candles below this level may drive selling trades until 38.2% Fibonacci retracement level of 1.0970, and below this, the next support holds around 1.0920, which marks 61.8% Fibonacci area. Overall, 1.0995 is a crucial trading level as above this; the EUR/USD pair may lead it’s prices further higher towards 1.1137. Bullish bias seems dominant today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.23373 after placing a high of 1.23630 and a low of 1.21807. Overall the movement of GBP/USD pair remained bullish throughout the day. The Pound outperformed on Tuesday and rose to a level 1.236 highest since May 12 on the back of raised optimism about the EU-UK trade deal.

The next round of Brexit talks are due next week, and there have been headlines revolving that British negotiators could seal their first victory in next talks with the E.U. Reports suggested that the European Union was willing to shift its stance on fisheries in the next round of talks with Great Britain next week. If that happens, it would be a significant concession from the bloc in talks with the U.K. on their new relationship after Brexit.

The fisheries were important to the E.U. as most of the fishing takes place in U.K. waters, but the catch goes to E.U. fishers. U.K. wanted to ensure that after Brexit, which will take effect from next year, the U.K. as a newly independent coastal state could be solely in control of its waters and fish.

So far, the European Union has been reluctant to give up U.K. waters and demanded the things to remain the same as they were before in fisheries. However, on Tuesday, an E.U. official said that the bloc’s executive committee, which will negotiate with the U.K. in the name of all 27 E.U. member states, could ease its demand if the U.K. were to move as well.

According to Michel Barnier, surrendering the access to Britain’s fishing waters would be just one of the costs the British government must pay for a trade deal with the bloc. However, he faced pressure from other officials not to surrender to Britain too soon.

Daily Support and Resistance

  • R3 1.259
  • R2 1.2477
  • R1 1.2405

Pivot Point 1.2292

  • S1 1.222
  • S2 1.2107
  • S3 1.2035

GBP/USD– Trading Tip

The GBP/USD prices traded sharply bullish soaring from 1.2200 level to place a high around 1.2360 level. The resistance level of 1.2360 is extended by an upward channel, which can be seen on the 4-hour timeframe. The 50 EMA is bullish, but the MACD is suggesting odds of selling bias in the GBP/USD pair, perhaps because the Sterling is in the overbought zone. Bullish crossover of 1.2360 level may lead Sterling prices further higher towards 1.2460, while support is likely to be found around 1.2289 and 1.2165. Consider taking buying trades over 1.2292 and selling below the same level today.


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.539 after placing a high of 107.921 and a low of 107.399. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair showed a bearish trend on Tuesday but consolidated in a range between 107.3 and 107.9.

At 18:00 GMT, the Housing Price Index for March from the United States was dropped to 0.1% against the forecasted 0.6% and weighed on the U.S. dollar. The S&P/CS Composite-20 HPI for the year advanced to 3.9% against the expectations of 3.4% and supported the U.S. dollar. At19:00 GMT, the Consumer Confidence from Conference Board for May decreased to 86.6 from the forecasted 87.1 and weighed on the U.S. dollar. The New Home Sales for April were recorded as 623K against the expected 429K and supported the U.S. dollar.

The closely watched Consumer Confidence from the United States declined and made the U.S. dollar weak across the board and ultimately dragged the USD/JPY pair on Tuesday. From the Japanese side, at 4:50 GMT, the Services Producer Price Index (SPPI) for the year was dropped to 1.0% against the forecasted 1.3%and weighed on Japanese Yen. At 9:30 GMT, All Industrial activities for March came in line with the expectations of -3.8%. At 10:00 GMT, the Core CPI for the year from Bank of Japan also dropped to -0.1% from the expected 0.0% and weighed on Japanese Yen.

The Governor of Bank of Japan, Haruhiko Kuroda, said that the central bank was ready to ease monetary policy further. To add more stimulus measures, the bank decided to expand its loan programs, cut the rates further, and ramp up the risky asset purchases. In his semiannual testimony to parliament, Kuroda said that Bank of Japan was ready to do whatever it can to ensure markets were stable. He added that the stability of markets was its first importance now because once the pandemic was over, Japan’s economy could resume a solid recovery path.

Daily Support and Resistance    

  • R3 108.39
  • R2 108.16
  • R1 107.86

Pivot Point 107.63

  • S1 107.33
  • S2 107.1
  • S3 106.79

USD/JPY – Trading Tips

The USD/JPY pair continues to trade choppy sessions within the same trading 107.950 – 107.350. Above 107.950 level, we may see USD/JPY prices heading towards the next resistance level of 108.330. The 50 EMA is currently supporting the USD/JPY around 107.350. Breakout of USD/JPY support area of 107.35 can lead the USD/JPY prices towards 106.850. So let’s consider taking buying trades over 107.63 and selling below the same level today. 

All the best for today! 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 22 – Top Trade Setups In Forex – ECB Monetary Policy Meeting Accounts Ahead! 

The U.S. Dollar Index (DXY) fell about 0.25% on the day to post the lowest close since May. Powell said that Fed might need to introduce more stimulus measures if the economic lockdown remains there for a long time. He also added that banks should prepare themselves for the bankruptcies of nonfinancial companies. Let’s keep an eye on U.K. Retail sales and ECB Monetary Policy Meeting Minutes.

Economic Events to Watch Today

 

 

 


EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.09777 after placing a high of 1.09988 and a low of 1.09185. Overall the movement of EUR/USD remained bullish throughout the day. The EUR/USD pair remained near 1.1000 after the release of FOMC meeting minutes. The surge in the EUR/USD pair suggested that the pair might break its 7-week range and move further to earn more gains.

The FOMC minutes failed to impress the market as there was no surprise element in Powell’s presentation and was ignored by market participants. It was widely expected that the coronavirus outbreak would continue to weigh on the economy, and the economic outlook would remain somewhat pessimistic. Greenback holds onto its losses as there was no room for surprises in the minutes of the meeting. 

The U.S. Dollar Index (DXY) fell about 0.25% on the day to post the lowest close since May. Powell said that Fed might need to introduce more stimulus measures if the economic lockdown remains there for a long time. He also added that banks should prepare themselves for the bankruptcies of nonfinancial companies.

On the data front, at 13:00 GMT, the Current Account Balance from the Eurozone showed a balance of 27.4B during March against 37.8B of February. At 14:00 GMT, the Final CPI from Eurozone for the year declined to 0.3% against the expectations of 0.4% and weighed on EUR. The Final Core CPI for the year came in line with the hopes of 0.9%. 

At 19:00 GMT, the Consumer Confidence on the Eurozone economic condition showed a decline to 19 forms the forecasted decline of 23 and supported EUR. The market participants ignored the poor than expected CPI from Eurozone, and EUR got its support after the release of consumer confidence, which showed less decline than expected.

Furthermore, the latest Franco-German proposal for a 500 euros fund to fight coronavirus crisis helped EUR pair to gain traction in the market and remain stronger than other currencies; this ultimately supported the upward trend of EUR/USD pair.

Daily Support and Resistance

  • R3 1.1067
  • R2 1.1038
  • R1 1.0994

Pivot Point 1.0965

  • S1 1.092
  • S2 1.0892
  • S3 1.0847

EUR/USD– Trading Tip

On Friday, the EUR/USD prices are holding at 1.0940 as these were facing strong resistance around 1.0993, which marks the triple top resistance level and can trigger selling in the pair. Conversely, the EUR/USD pair may find support around 1.0883, once the 1.0993 level gets violated. The MACD is recently forming selling candles, which suggests the trend of the sale in the pair. So the overall trading range can be from 1.0994 level to 1.0886. On Friday, we can look for selling trades under 1.0965 for 40/50 pips profit. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.22225 after placing a high of 1.22495 and a low of 1.21855. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair continued to follow its previous day’s trend of downward movement and dropped on Thursday as well. The decline in currency pair could be attributed to the increasing speculations that the Bank of England will consider to ease monetary policy further. The Governor of Bank of England, Andrew Bailey, said that he had changed his position into negative interest rates given the crisis.

He added that more easing measures from the Bank of England were more likely, but the interest rates were below on his priorities. He said that though it was not the time for negative interest rates, they could not be excluded from options.

Furthermore, on the lack of progress on trade talks with the European Union, the U.K. was driving its way towards no-deal Brexit. This raised fear amongst investors and raised uncertainty about the future relationship of Great Britain with E.U., making GBP weaker on the board. In the current context of coronavirus shutdown, the U.K. economy was already disturbed, and chances for an unfriendly exit from E.U. along with coronavirus would impact highly negative on the common currency. 

On the data front, at 13:30 GMT, the Flash Manufacturing PMI from Great Britain showed a surge in Index with 40.6 points against the 35.1 of forecast and supported GBP. Sterling was also supported by Flash Services PMI, which exceeded the expectations of 24.1 and came in as 27.8. From the U.S. side, the increased Jobless Claims last week by 2.43M weighed on the U.S. dollar. However, the Flash Manufacturing PMI, which was key data on Thursday from the American side, came in support of the U.S. dollar when released as 39.8 against the expectations of 39.3.

The strong U.S. dollar on Thursday amid better than expected PMI data added in the downfall of GBP/USD pair.

Daily Support and Resistance

  • R3 1.232
  • R2 1.2285
  • R1 1.2255

Pivot Point 1.222

  • S1 1.219
  • S2 1.2155
  • S3 1.2124

GBP/USD– Trading Tip

The GBP/USD continues to trade within the same technical levels, which we discussed a day before. The Cable is facing resistance around 1.2269 level, and it continues to develop doji and bearish engulfing candles below 1.2269 zones, which has driven a bearish retracement in the Cable. On the lower side, the Sterling may find support against the U.S. dollar around 1.2170 level. The MACD and 50 EMA are supporting selling bias in the pair. Today, the release of U.K. Retail Sales m/m may help drive further movement in the market. Therefore, the bullish breakout of 1.2270 level can lead the Sterling prices towards 1.2360. While breakout of the support level of 1.2169 may lead the Sterling pair towards the 1.2080 support zone. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.604 after placing a high of 107.847 and a low of 107.415. Overall the movement of the USD/JPY pair remained bullish throughout the day. At 4:50 GMT, Japan’s Merchandise Trade Balance for April showed a deficit of 1.0 Trillion Japanese Yen on Thursday. At 5:30 GMT, the Flash Manufacturing PMI came in as 38.4 during May compared to 41.9 of April.

The exports from Japan showed a decline of 21.9% and imports by 7.2%, while overall trade balance showed a deficit and weighed on Japanese Yen. The weak JPY gave strength to the USD/JPY pair on Thursday.

On the American side, the U.S. jobless Claims for the past week exceeded over 2.43M from the expectations of 2.4M and weighed on the U.S. dollar at 17:30 GMT. The Philly Fed Manufacturing Index for May declined by 43.1 against 40.0 expected and weighed on the U.S. dollar.

However, at 18:45 GMT, the Flash manufacturing PMI from the U.S. for the month of May surged to 39.8 against the expected 39.3 and supported the U.S. dollar. The Flash Services PMI for May also exceeded to 36.9 from 32.6 of expectations. 

The C.B. Leading Index for April was expected to be declined by 5.5%, but in actual, it showed a decline of 4.4% and supported the U.S. dollar. The Existing Home Sales remain flat with expectations of 4.33M.

Better than expected economic data from the United States gave strength to the U.S. dollar and moved USD/JPY pair in an upward direction to post daily gains. On the other hand, Fed Chairman Jerome Powell showed concerns about the economic indicators to hit their bleakest levels since the Great Depression. He said that the U.S. economy was facing a whole new level of uncertainty amid the coronavirus crisis. 

Daily Support and Resistance    

  • R3 108.21
  • R2 108.04
  • R1 107.83

Pivot Point 107.65

  • S1 107.44
  • S2 107.26
  • S3 107.05

USD/JPY – Trading Tips

On Friday, the USD/JPY continues trading sideways in between 107.630 – 107.350. Above 107.650 level, we may see USD/JPY prices heading towards the next resistance level of 108.130. The ascending triangle pattern was already violated, and the upward trendline is expected to keep the USD/JPY supported around 107.350. Breakout of USD/JPY support area of 107.35 can lead the USD/JPY prices towards 106.850. So let’s consider taking buying trades over 107.350 today. 

All the best for today! 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 20 – Top Trade Setups In Forex – European CPI Figures Ahead! 

The U.S. Federal Reserve will release its latest FOMC meeting minutes. The European Commission will post the May Consumer Confidence Index (-23.7 expected) and final readings of April CPI (+0.4% on-year expected). The U.K. Office for National Statistics will release April CPI (+0.9% on-year expected).

Economic Events to Watch Today 

 

 

 


EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.09228 after placing a high of 1.09759 and a low of 1.09020. Overall the movement of the EUR/USD pair remained bullish throughout the day. After gaining almost 100 pips on Monday, the EUR/USD pair rose to near its highest level in 2 weeks of 1.0976 level on Tuesday. The upbeat market mode was derived by the Franco-German recovery fund proposal, which was announced on Monday and provided a boost to the single currency EUR. 

The Vice President of the European Commission, Valdis Dombrovskis, said that the European Stability Mechanism (E.S.) strongly supported the Franco-German proposal. Commission was also looking forward to presenting the proposal in the upcoming European summit on May 27.

Following the previous day’s gains, the EUR/USD pair continued to rise and was further supported by the better than expected economic data release on Tuesday.

At 14:00 GMT, the ZEW Economic Sentiment from the European Union showed that the economic outlook of the Eurozone in the view of institutional investors and analysts increased to 46.0 from the expected27.4 and supported EUR. 

The German ZEW Economic Sentiment also showed an improved economic outlook after releasing as 51.0 against the expected 30.0 during the month of May and supported EUR.

The better than the expected economic outlook of the whole bloc, along with Germany even in the lockdown time, gave a sudden push to the already prevailing bullish trend in EUR/USD and rose its prices above two weeks high. However, pair failed to hold its gains and started to drop in late-session but managed to end its day with a bullish candle.

On the other hand, the greenback lost its demand in the absence of any significant economic data. Only Housing Starts in the month of April were released from the U.S. on Tuesday, which declined to 0.89M against the 0.95 forecasted and weighed on the U.S. dollar.

Meanwhile, the Fed Chair Jerome Powell also refrained from providing any specific surprising remarks about the economy or policy outlook and hence kept the U.S. dollar under pressure. He said that the Fed would remain committed to using its all tools to recover the U.S. economy from a corona-induced crisis. U.S. Dollar Index fell near 99.50 level on that day.

Daily Support and Resistance

  • R3 1.1089
  • R2 1.1008
  • R1 1.0961

Pivot Point 1.088

  • S1 1.0833
  • S2 1.0752
  • S3 1.0705

EUR/USD– Trading Tip

The technical outlook for EUR/USD pair seems bullish as the pair is trading at 1.0938, having formed a bullish engulfing pattern above an immediate support level of 1.0918 level. On the 4 hour timeframe, the pair is also forming a higher high and higher low pattern, which can drive further buying trends in the EUR/USD pair. The MACD is bullish, while the 50 EMA is also supporting the bullish bias among traders. The pair has the potential to trade towards north to target 1.0993 triple top area while support holds at 1.0918 and 1.08850 level today.


GBP/USD – Daily Analysis

The GBP/USD prices were closed at 1.22482 after placing a high of 1.22961 and a low of 1.21839. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair rose for 2nd consecutive day on Tuesday amid the broad-based U.S. dollar weakness and better than expected employment data from the U.K. 

The U.S. dollar was already under pressure the previous day after the announcement of the Franco-German recovery fund proposal, which consists of 500 Billion euros. The increased risk appetite in the market also made the U.S. dollar weaker on Tuesday. 

Furthermore, better than expected U.K. employment data on Tuesday gave strength to GBP and raised GBP/USD prices. The office for National Statistics reported that U.K. Unemployment Rate in April dropped to 3.9% from the expected 4.4% and supported GBP.

Despite the decreased unemployment rate, around 857K people filed for jobless claims in April against the forecasted 675K. The decreased unemployment rate, which covers three months to March, showed that unemployment might have fallen sharply during April considering the increased numbers of jobless claims that month.

Meanwhile, U.K. announced a new tariff regime for Brexit that will remove tariffs on 30 billion pounds worth of imports or about 60% worth of trading coming into the U.K. The latest tariff named U.K. Global Tariff (UKCT) will become effective from January 2021 when the transition period will end.

AT 11:00 GMT, the Claimant Count Change for April showed that almost 856.5K people applied for jobless benefit claims against the expectations of 675.0K and weighed on Sterling. At 11:02 GMT, the Average Earning Index for the quarter showed a decline to 2.4% from the expected 2.7% and weighed on U.S. Dollar. However, the Unemployment rate for March showed a decline to 3.9% against the anticipated 4.4% and supported Pound.

Daily Support and Resistance

  • R3 1.2411
  • R2 1.2319
  • R1 1.2257

Pivot Point 1.2166

  • S1 1.2104
  • S2 1.2013
  • S3 1.195

GBP/USD– Trading Tip

On Wednesday, the GBP/USD traded sharply bullish to trade at 1.2245 level despite the release of worse than expected Labor market reports from the U.K. At the moment, Cable faces resistance around 50 EMA, which holds at 1.2255 level. The closing of candles below 1.2260 can drive selling. Still, considering the recent bullish engulfing and long histograms of GBP/USD pair, we may see a continuation of a bullish trend in the Sterling. On the upper side, the violation of 1.2246 level may lead Sterling towards 1.2318 today.  


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.700 after placing a high of 108.086 and a low of 107.261. Overall the movement of the USD/JPY pair remained bullish throughout the day. The pair USD/JPY moved above 108.00 level on Tuesday, which was the one-month top-level amid increased risk-on market sentiment. The safe-haven Japanese Yen was under pressure after the latest optimism related to the encouraging initial results of coronavirus vaccine trials. Weaker Yen moved the USD/JPY pair in the opposite direction and made it to post gains above 108.00 level.

The intraday selling bias towards the Japanese Yen increased after the Bank of Japan called out for an unscheduled meeting on Friday. This fueled speculations that Bank would announce more easing measures.

The strong positive momentum due to weakened Yen lifted the USD/JPY prices to its highest level since April 13. However, the rally remained limited due to the rising concerns about the US-China relationship.

Another reason behind the limited rally on Tuesday was the fears about the second-wave of coronavirus. Senators questioned the Fed Chair Jerome Powell and the U.S. Treasury Secretary Steven Mnuchin about their stewardship of specific aspects of the $2 trillion package on Tuesday.

The Senate Banking Committee held its first look at spending under the package announced in March to assist people affected by the coronavirus pandemic. Mnuchin and Powell showed different perspectives on the economic outlook. Mnuchin remained optimistic and said that in the second half of 2020, the economy would see an upturn, while Powell suggested that congress might need more than trillions to aid the economy.

Daily Support and Resistance    

  • R3 108.04
  • R2 107.78
  • R1 107.56

Pivot Point 107.3

  • S1 107.09
  • S2 106.82
  • S3 106.61

USD/JPY – Trading Tips

On Wednesday, the USD/JPY mostly remains mostly bearish following a bullish breakout of the choppy trading range of 107.480 – 107.029 level. For now, the pair is holding at 107.630, having immediate support around 107.500. Above this level, we may see USD/JPY prices heading towards the next resistance level of 108.130. The ascending triangle pattern has already been violated, and it’s expected to kee the USD/JPY supported around 107.500. So let’s consider taking buying trades over 107.500 today. All the best for today! 

Categories
Forex Market Analysis

Daily F.X. Analysis, May 15 – Top Trade Setups In Forex – U.S. Retail Sales in Highlights!

On the news front, the economic calendar remains busy on Friday. Today’s releases may trigger some price action in the Euro and U.S. related pairs, especially on the release of German GDP, Eurozone Flash GDP, and U.S. core retail sales figures, which are due to come out during European and U.S. session respectively.

Economic Events to Watch Today 

 

 

 


EUR/USD – Daily Analysis

During the early Asain trading session, the EUR/USD currency pair flashing green, but remains trading in the confined range around above the 1.0800 level ahead of Germany’s preliminary gross domestic product (GDP) for the first quarter. The broad-based U.S. dollar modest weakness helping the currency pair to stay positive and kept a lid on any additional losses, at least for now. For example, the currency pair is looking directionless as the S&P 500 is sidelined, and the Asian stocks are adding in a mixed performance. 

The EUR/USD is trading at 1.0806 and consolidates in the range between the 1.0798 – 1.0809. However, the traders are keenly awaiting Germany’s preliminary gross domestic product ahead of a strong position.

At the data front, Germany’s preliminary gross domestic product (GDP) for the first quarter, which is scheduled to publish at 06:00 GMT, is anticipated to show the old continent’s biggest economy declined by 2.2%, having increased by 0.4% in the final 3-months of 2019. It should be noted that the GDP prints of -2.2% or lower would be considered the worst reading since the ist-quarter of 2009. 

Germany had declared a secure national lockdown on March 22, which meant the economic activity came to a stop only in the last 8 or 9 of the 1st-quarter. In contrast, Germany is dependent on the dragon nation, which had already faced a sharp recession in the activity in the first two months of the year, mainly due to the coronavirus pandemic.

Therefore, there are many chances that Germany reporting a bigger-than-expected recession in the first quarter will not be rejected. As we already mentioned, the economists are expecting a 2.2% decrease, as per Germany’s DIW economic institute, the economy expected declined by 2% in the first quarter. Alternatively, the DIW expects a 10% decline in the GDP in the second quarter. 

Moving on, the EUR/USD currency pair may not pay any significant attention if the GDP prints in line with estimates as the market already priced in the worst condition of significant economies during the March and more so in April caused by coronavirus outbreak.

The currency pair could be able to take bids only if prints would be a surprise beat on expectations, but the gains would be temporary or short-lived if the risk sentiment turns heavy. Looking forward, market participants now look forward to Germany’s preliminary gross domestic product (GDP) for the first quarter, which is scheduled to publish at 06:00 GMT. The trade/virus updates could also entertain market traders.

Daily Support and Resistance

  • S1 1.0673
  • S2 1.0758
  • S3 1.079
  • Pivot Point 1.0843
  • R1 1.0874
  • R2 1.0928
  • R3 1.1013

EUR/USD– Trading Tip

On Friday, the EUR/USD is trading at 1.0807, bouncing off over the double bottom support level of 1.07756. On the 4 hour chart, the EUR/USD is closing bullish candles above upward channel trendline, but at the same time, the 50 EMA and horizontal resistance seem to drive bearish sentiment for the EUR/USD pair. Extension of selling below 1.0843 level may lead the EUR/USD prices towards 1.07782 level, and below this, the next support is likely to be found around 1.0730. Consider staying bullish above and bearish below 1.0770 level today. 


GBP/USD – Daily Analysis

The GBP/USD currency pair failed to stop its 5-day losing streak and dropped below the 1.2210 level while representing 0.15% losses on the day mainly due to the Brexit worries and coronavirus crisis. The broad-based U.S. dollar over-all bullish sentiment also weighed on the currency pair and kept the pair down. The GBP/USD is trading at 1.2208 and consolidates in the range between the 1.2203 – 1.2237. However, the traders are cautious about placing any strong position as they are keenly awaiting today’s U.S. consumer-centric data.

At the Brexit front, the European Union (E.U.) and the United Kingdom moderators are still pushing to cancel Brexit talk, which decided to happen through video conferences. At the same time, the European Commission’s (E.C.) took legal action against the U.K., which made talks tougher to happen. The European Commission initiated legal proceedings against the U.K. on Thursday, while accusing the U.K. about failing to comply with E.U. law on free movement which eventually keeps the cable currency under pressure and contributes to the pair’s declines.

On the flip side, the UK PM Boris Johnson keeps its preference high toward border checks at the Northern Ireland (N.I.) while the N.I. Secretary Brandon Lewis has repeatedly said there shall not be a border down the Irish Sea.

At the coronavirus front, the infected cases by coronavirus reached around 233 thousand overall in England, including 25 thousand in London,

as per the latest research by the Public Health England (PHE) and Cambridge University. In the meantime, the United Kingdom is talking with Swiss drugmaker Roche Holding AG about to buy an accurate COVID-19 antibody test after getting preliminary approval by the European Union and the United States.

Apart from this, the Bank Of England governor Andrew Bailey showed a willingness to take further action but denied rate cuts. The reason for the pairs bearish moves could also be attributed to the statement of the British central bank’s citizen panel in which they expect COVID-19 to have a large and enduring influence on the economy and society more broadly.

At the USD front, the broad-based U.S. dollar bolsters by the receding expectations of negative Fed rate and the increased probabilities of further stimulus from the government. While the Dollar Index (DXY), a gauge of the greenback versus significant currencies, remains mildly bid around 100.30 by the press time.

Daily Support and Resistance

  • R3 1.2577
  • R2 1.2508
  • R1 1.2422

Pivot Point 1.2353

  • S1 1.2268
  • S2 1.2198
  • S3 1.2113

GBP/USD– Trading Tip

On the last trading day of the week, the GBP/USD is trading sideways at 1.2200 after breaking below the narrow trading range of 1.2320 – 1.2245. The Cable has formed a new range of 1.2245 – 1.2186, however it’s still holding below 50 EMA, which is extending resistance around 1.2260 level today. On the 4 hour chart, the GBP/USD is gaining support at 1.2180 level while the 50 EMA and horizontal resistance stay at a level of 1.2245. 

The violation of the sideways trading range of 1.2245 – 1.2180, and the release of U.S. retail sales may help drive breakout in the GBP/USD pair. 

The GBP/USD pair may lead its prices towards an immediate support level of 1.2190 and 1.2150 in case of positive date; elsewhere, the GBP/USD pair may soar towards 1.2240 and 1.2310. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.224 after placing a high of 107.363 and a low of 106.773. Overall the movement of the USD/JPY pair remained bullish throughout the day. After dropping below 107 level on Thursday, the USD/JPY pair regained its strength and posted gains for the day on the back of the improved market sentiment. The increased claims for jobless benefits from the United States during the last week failed to weigh on the U.S. dollar. A total of 2.9M Americans applied for unemployment benefits in the previous week against the expected 2.5M.

At 17:30 GMT, the Unemployment Claims for last week exceeded the expectations of 2500K and came in as 2981K and weighed on the U.S. dollar. The Import Prices for April were declined by 2.6% against the forecasted decline by 3.1% and supported the U.S. dollar.

The U.S. Dollar Index ignored the job data from the United States and moved above 100.40 level on Thursday, which helped USD/JPY pair to stretch its gains. Another factor adding in the upward trend of the USD/JPY pair was the comments from Donald Trump in support of the dollar. He said that a strong dollar was a great thing that could help in fast economic recovery after the coronavirus, this triggered the U.S. dollar buying wave and extended USD/JPY pair’s gains.

From the Japan side, at 4:50 GMT, The M2 Money Stock for the year from Japan was recorded as 3.7% against the forecast of 3.4% and supported Japanese Yen. At 10:59 GMT, the Prelim Machine Tool Orders for the year showed a decline of -48.3% in comparison to the previous -40.7%. 

Daily Support and Resistance    

  • R3 109.37
  • R2 108.57
  • R1 108.12

Pivot Point 107.33

  • S1 106.88
  • S2 106.09
  • S3 105.64

USD/JPY – Trading Tips

The safe-haven Japanese yen continues to trade in line with our previous forecasts. On Friday, the USD/JPY traded bearishly to trade below the support level of 107, which marked the 50% Fibonacci retracement level. The USD/JPY is holding at 107.05, where the 50 EMA is supporting the pair, and it may drop further below the 107 level. At the moment, the 4-hour candle appears to close below 107 support become resistant, and this may drive more selling in the USD/JPY pair. The pair may extend selling until 106.600 level, whereas the closing of buying candles above 107 can trigger bullish bias until 107.50. By the way, bearish bias seems solid today. All the best for today! 

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Forex Market Analysis

Daily F.X. Analysis, April 22 – Top Trade Setups In Forex -U.K. Inflation Stabilises! 

On the forex front, the U.S. dollar gained traction against other major currencies, with the Dollar Index climbing 0.3% on the day to 100.20. The U.S. official data showed that Existing Homes Sales fell to an annualized rate of 5.27 million units in March (5.25 million units expected).

The British Consumer Prices Index (CPI), including owner-occupiers’ housing inflation rate, came out at 1.5% in March 2020. Although it’s down from 1.7% in February 2020, it’s not as bad as investors were expecting considering the lockdown in global markets. 

Economic Events to Watch Today     

 

 


 EUR/USD – Daily Analysis

The EUR/USD fell by nearly 0.1% to trade at 1.0865. While Spain’s central bank announced, the country’s GDP could fall by 6.8% to 12.4% this year. Later in the today, the major focus will stay on the German ZEW Current Situation Index for April will be released (-75.0 estimated).  

After the Eurozone divided on community debt, most of the analytes are worried that the finance ministers’ may unable to provide a suitable fiscal stimulus to support growth. So, the shared currency could remain under pressure ahead of the Thursday summit.

At the coronavirus front, as per the latest report, the number of confirmed coronavirus cases grew to 145,694, with 4,879 deaths reported in Germany so far. As the cases increased by 2,237 in Germany, a 1.6% rise picking-up pace from Tuesday’s 1.3% increment, the death toll moved sharply up by 281 vs. 194 a day before.

Looking forward, the upbeat Eurozone Consumer Confidence, which is scheduled to release at 14:00 GMT, may put a bid under EUR/USD currency pair. However, the pair trend will remain sluggish until the pair break the trading range of 1.0897 to 1.08616. 

Daily Support and Resistance

  • S1 1.0724
  • S2 1.0788
  • S3 1.0823

Pivot Point 1.0852

  • R1 1.0887
  • R2 1.0916
  • R3 1.098

EUR/USD– Trading Tips

On Wednesday, the EUR/USD is trading sideways at 1.0825, as investors seem to wait for a solid reason to enter the market. The overall bias remains bearish as the EUR/USD prices are holding below 50 EMA, which is extending resistance around 1.08945 level. Continuation of a selling trend below 1.08945 level can continue selling until the next support area of 1.0772, but on the way, the pair may find support around 1.0815 level. 

The EUR/USD is likely to find support around 1.0772, but below this, the next support prevails around 1.0652 level. The pair may find an immediate resistance level of around 1.09230, where the bullish breakout of this level can extend buying until the next resistance level of 1.1036. Conversely, we should look for selling trades below 1.0894.  


GBP/USD – Daily Analysis

The GBP/USD soared 0.3% to trade at 1.2318 as the British Consumer Prices Index (CPI), including owner-occupiers’ housing inflation rate, came out at 1.5% in March 2020. Although it’s down from 1.7% in February 2020, it’s not as bad as investors were expecting considering the lockdown in global markets. 

 At the USD front, investors prefer to choose the U.S. dollar because of its safe-haven-demand in the market due to the fears of economic fallout, which is caused by the coronavirus outbreak. The dollar index, which measures the worth of the greenback against majors, rose 0.20% to levels above 100.00.

The reason behind the decline in GBP/USD pair could also be the immediate rise in COVID-19 cases, with the curve still not notably peaking. It indicates that there is still a high chance that lockdowns could last longer than expected, while the Bankruptcy and bad loans will likely boost the risk-off sentiment in the market and provide further support to the U.S. dollar again.

Apart from the U.K., U.S. President Donald Trump suggested that approximately 20 states ready for re-open while also showing a willingness to sign the bill that stops immigration into the U.S. for 60 days. As in result, the risk sentiment remains under pressure.

The reason behind the risk-off market sentiment could also be the early Asian news surrounding the U.S. Senate’s passage of $484 billion COVID-19 relief package and BOJ’s likely decline of economic and price forecasts. Moreover, statements from the BOE’s Bailey were also necessary to remark during the early Asian session.

As in result, the U.S. 10-year Treasury yields declined by 2-basis points (bps) to 0.55%, after dropping 4-bps on Tuesday, while the most stocks in Asia-Pacific flashing losses by the pres time.

    

Daily Support and Resistance

  • S1 1.1974
  • S2 1.2148
  • S3 1.2223

Pivot Point 1.2322

  • R1 1.2397
  • R2 1.2496
  • R3 1.2671

GBP/USD– Trading Tip

Yesterday, the GBP/USD fell sharply to trade at 1.2250 after violating the horizontal support level of 1.2424. On the 4 hour chart, the Cable has closed Doji candle above 1.2250 level can drive bullish bias until 1.2350. On the upper side, the Sterling may find next resistance around 1.2426, it’s the same level that supported the pair previously, and now it’s likely to drive selling bias in the GBP/USD pair. On the lower side, the violation of the 1.2265 level can lead the GBP/USD prices towards 1.2175. The 50 EMA and MACD are both are suggesting selling bias in the Cable. So let’s look for selling trades below 1.2322 and bullish above the same level today. 

USD/JPY – Daily Analysis

On Wednesday, the USD/JPY is trading around 107.500 level, mostly exhibiting sideways trading due to a lack of major economic events in the market. The U.S. dollar index slipped to the fresh lows of 100.07 ahead of recovering some ground, still bearish by 0.15% on the day.

The Japanese yen seems to suffer due to a lack of confidence when the state of emergency is being lifted in Japan. While drop-in, the domestic macroeconomic indicators are expected to keep the Japanese yen’s in a bearish mode while maintaining the USD/JPY bullish. Lately, the uptrend in the JPY could be limited due to the forecast of the Bank of Japan (BOJ) support measures to boost funding for the companies due to be announced next week. 

The U.S. Treasury prices advanced as investors continued to seek safe-haven assets. The benchmark 10-year U.S. Treasury yield declined to 0.571% from 0.625% Monday.

On the negative side, the greenback gained ground due to the oil price crash triggered a dash for cash. The high uncertainty in the market also boosted the greenback demand. So, if that trend continues during the ay ahead, the yellow metal could come under pressure.

Daily Support and Resistance    

  • S1 105.92
  • S2 106.84
  • S3 107.44

Pivot Point 107.76

  • R1 108.36
  • R2 108.69
  • R3 109.61

USD/JPY – Trading Tips

The USD/JPY is trading mostly sideways within a narrow trading range of 108.020 – 107.300 zones. At the moment, it’s holding at 107.597, having formed a descending triangle pattern on the 4-hour timeframe. The triangle pattern is extending resistance around 107.850, along with support around 106.980.  

In case, the USD/JPY violates the descending triangle pattern; we may see pair dropping towards 106.200. While on the upper side, a bullish breakout of 108 can lead USD/JPY prices towards 109.100. The leading indicator, such as MACD and 50 EMA, are supporting bearish bias in the market today. Let’s wait for a breakout before taking more trades today.

All the best for today! 

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Forex Market Analysis

Daily F.X. Analysis, April 21 – Top Trade Setups In Forex – Economic Sentiment in Highlights! 

On the forex front, the U.S. dollar firmed against its major peers, with the Dollar Index gaining 0.2% on the day to 99.95. The ZEW survey results of April will be released for Germany (current situation at -75.0, expectations at -42.0 expected) and the Eurozone.

The U.K. Office for National Statistics will report a jobless rate for the three months to February (steady at 3.9% expected). While in the U.S., the National Association of Realtors will report March existing home sales (5.30 million units expected).

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD fell by nearly 0.1% to trade at 1.0865. While Spain’s central bank announced, the country’s GDP could fall by 6.8% to 12.4% this year. Later in the today, the major focus will stay on the German ZEW Current Situation Index for April will be released (-75.0 estimated).  

European stocks were mostly trading higher, with the Stoxx Europe 600 Index surging 0.7%. Both Germany’s DAX and the U.K.’s FTSE 100 added 0.5%, and France’s CAC was up 0.7%, which are somehow supporting the Euro, the single currency. 

As of now, the market participants seem very concerned about the negative impact of the oil prices Monday’s declines and keeps their eyes on it. As in result, the U.S. dollar could continue to gain ground during the Europan trading hours ahead while the S&P 500 futures are now reporting a 0.65% drop. 

The additional bearish pressure could arise from President Trump’s decision to delay immigration to the U.S. to control the coronavirus outbreak. Let’s brace to trade ZEW survey results of April will be released for Germany (current situation at -75.0, expectations at -42.0 expected) and the Eurozone. 

Daily Support and Resistance

  • S1 1.0758
  • S2 1.0813
  • S3 1.084

Pivot Point 1.0869

  • R1 1.0896
  • R2 1.0924
  • R3 1.098

EUR/USD– Trading Tips

Technically, the EUR/USD is trading with a slightly bearish bias at 1.0825, exhibiting a bearish crossover below 50 EMA, which is now extending resistance around 1.0903 level. Continuation of a selling trend below 1.0903 level can extend selling until the next support area of 1.0772, but on the way, the pair may find support around 1.0815 level. The EUR/USD is likely to find support around 1.0772, but below this, the next support prevails around 1.0652 level. The pair may find an immediate resistance level of around 1.09230, where the bullish breakout of this level can extend buying until the next resistance level of 1.1036. Conversely, we should look for selling trades below 1.0870.

GBP/USD– Daily Analysis

The GBP/USD slid 0.5% to 1.2442. Investors will focus on the U.K. jobless rate for the three months to February due later in the day (steady at 3.9% expected). The United Kingdom and European Union Brexit drama keep moving while the latest news recommending to keep a check of Britain’s £39 billion has also been underlined by the cost of dealing with coronavirus, especially the economic £250 billion rescue package announced by Chancellor Rishi Sunak to protect jobs and businesses.

At the USD front, investors prefer to choose the U.S. dollar because of its safe-haven-demand in the market due to the fears of economic fallout, which is caused by the coronavirus outbreak. The dollar index, which measures the worth of the greenback against majors, rose 0.20% to levels above 100.00.

Later today, the U.S. dollar could continue to gain ground during the Europan trading hours ahead due to high safe-haven demand in the market in the wake of intensifying coronavirus fears while the S&P 500 futures are now reporting a 0.65% drop. 

On the other hand, the reason behind the cable’s pair declines could also be the immediate rise in COVID-19 cases, with the curve still not notably peaking. It indicates that there is still a high chance that lockdowns could last longer than expected, while the Bankruptcy and bad loans will likely boost the risk-off sentiment in the market and provide further support to the U.S. dollar again.

Looking forward, traders are keenly waiting for the key U.K. data which is scheduled to release during this day ahead As well as, the coronavirus related headlines also will be key to watch for taking fresh directions in the U.S. dollar.

    

Daily Support and Resistance

  • S1 1.2298
  • S2 1.2374
  • S3 1.2407

Pivot Point 1.245

  • R1 1.2483
  • R2 1.2526
  • R3 1.2601

GBP/USD– Trading Tip

Taking a look at the 4-hour timeframe, the GBP/USD is trading at 1.2394 level, violating the support level of 1.2400 level. A bearish breakout of 1.2400 support area is expected to trigger a sell-off until 1.2310. The 50 periods EMA is also keeping the GBP/USD pair under pressure while extending resistance around 1.2430. Thus, the bounce off above this level can lead the GBP/USD pair towards the next resistance level of 1.2657. While bearish breakout of 1.2460 can open up further room for selling until the next support area of 1.2220. 

USD/JPY – Daily Analysis

On Tuesday, the USD/JPY is trading with a selling bias around 107.350, due to intensifying coronavirus fears as increased risk sentiment is driving the demand for the safe-haven currency. The slump in the Japanese exports for March keeps Japanese yen down, which also supports the currency pair to stay at the upside. 

The U.S. dollar extends taking bids mostly due to its safe-haven demand in the wake of intensified coronavirus fears. Considering the fresh report that the United States death toll surged over 40,000, whereas SkyNews mentions the U.K. has a bit over 16,000 people who died from the virus.

Looking forward, the North Korean leader’s health and oil moves will be key to watch, and coronavirus updates could be the driver seat for taking fresh directions. Alongside, the trader will keep their eyes on the U.S. dollar dynamics.

Daily Support and Resistance    

  • S1 105.92
  • S2 106.84
  • S3 107.44

Pivot Point 107.76

  • R1 108.36
  • R2 108.69
  • R3 109.61

USD/JPY – Trading Tips

The USD/JPY is trading slightly bearish at 107.339, having formed a descending triangle pattern on the 4-hour timeframe. The triangle pattern is extending resistance around 107.850 along with resistance around 106.980. As we know, the descending triangle pattern usually breakout on the lower side, and if this happens, the violation of 106.980 level may send the USD/JPY currency pair towards 105.850 level. 

All the best for today! 

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Forex Assets

BTC/USD – Trading Costs Involved While Trading This Crypto-Fiat Pair

Introduction

Apart from currencies pairs, exchanges allow trading of cryptocurrencies as well. Cryptocurrencies can be bought and sold in the exchange market through Forex brokers. Trading cryptocurrencies can be closely related to Forex trading but not stock trading. This is because cryptos are traded as pairs and not individually. In this series, we will be analyzing the trading costs involved while trading cryptocurrencies that are paired with fiat currencies (Ex: USD).

BTC/USD is a cryptocurrency pair where BTC stands for Bitcoin, and USD stands for US Dollar. This pair is traded through Forex brokers as CFDs, or through cryptocurrency exchanges where cryptos are bought and sold exclusively.

Understanding BTC/USD

The price of BTC/USD in the exchange market represents the value of the US Dollar equivalent to one 1 Bitcoin. It is quoted as 1 BTC per X USD. For example, if the current market price of BTCUSD is 7356.50, then it can be said that one Bitcoin is equal to the US $7356.50.

BTC/USD specifications

Spread

Spread is the difference between the bid and the ask price in the exchange market. It is determined by the brokers and exchanges, and it hence varies from time to time. Typically, the spreads for trading cryptocurrencies are very high. In recent years, the spread of coins having two decimal places is between 1500-6000 pips. The approx. spread on ECN and STP accounts are given below.

  • Spread on ECN: 3000 pips (30 USD)
  • Spread on STP: 3050 pips (30.5 USD)

Fees

The fee is simply the commission paid for the position a trader takes. It is charged only for ECN and Pro accounts and not for STP accounts. For our analysis, we shall keep the fee at 45 pips.

Slippage

Slippage is the difference between the price at which a client executed trade and the price which was actually given by the broker. This difference occurs either because of high market volatility or speed of trade execution.

Trading Range in BTC/USD

The trading range is the representation of the pip movement in the pair for different timeframes. The values are calculated using the average true range indicator. And the procedure to assess it is given below as well.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

BTC/USD Cost as a Percent of the Trading Range

Cost is a factor that varies with the change in the volatility of the market. By finding the ratio between the total cost and volatility, the variation in the costs is measured.

ECN Model Account

Spread = 3000 | Slippage = 25 |Trading fee = 45

Total cost = Slippage + Spread + Trading Fee = 25 + 3000 + 45 = 3070

STP Model Account

Spread = 3050 | Slippage = 25 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 25 + 3050 + 0 = 3075

The Ideal way to trade the BTC/USD

It is a general impression that trading cryptos are very risky because of its high volatility. But it is not completely true. To clear the misconception, consider the following example.

The pip value of BTC/USD per lot is 0.01 USD. That is, for every pip up or down, you will gain or lose 0.01 USD. The average pip movement in the 1H timeframe is 9100 pips. So, if you trade one lot of BTC/USD, you will win or lose about $0.01 x 9100 = $91 in a time frame of one hour. Hence, though the pip movement seems to be high, the profit/loss remains within decent boundaries.

Considering the cost variation in the above tables, it can be inferred that the costs are more for low volatile markets and less for a highly volatile market. But, the cost for average volatility acts as a median. Hence, trading when the volatility is around the average values is recommended. Furthermore, costs can be lowered by trading via limit orders instead of market orders. In doing so, the slippage on the trade will be nullified and will not be included in the total cost. In the above example, the total cost would reduce by 25 pips.

That’s about the trading costs involved while trading the BTC/USD pair. We will be discussing more Crypto/Fiat pairs in the upcoming articles. In case of any queries, let us know in the comments below. Cheers!

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Forex Assets

Trading Costs Involved While Trading The USD/PHP Forex Pair

Introduction

USD/PHP is the abbreviation for the US dollar versus the Philippine Peso. Since Philippine is involved in the pair, this classified under the Asian emerging pairs. In this pair, the USD is the base currency and the PHP is the quote currency.

Understanding USD/PHP

The current market price determines the price of PHP that is equivalent to one US dollar. It is simply quoted as 1 USD per X PHP. For example, if the price of this pair was 50.96, then around 51 pesos would be required to buy one US dollar.

Spread

The difference between the bid price and the ask price is referred to as the spread. This value a variable that varies from broker to broker as well as the type of execution model used by the brokers.

ECN: 3 pips | STP: 4 pips

Fees

The fee is a synonym for commission. It is levied on the ECN accounts only and not STP accounts.

Slippage

Slippage is some sort of a fee that is paid only on market orders. Slippage is the pip difference between the trader’s requested price and the price that was given by the broker. There is variation primarily due to two reasons – Market’s volatility & Broker’s execution speed

Trading Range in USD/PHP

Wanting to know how much could be your minimum average and maximum profit/loss of a trade in a given timeframe? Below is a table that will help you with it. With the pip movement values in the table, one can determine their risk on the trade. All you have to do is, multiply the volatility value with the pip value ($19.24). This will yield the value for one standard lot size.

 Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

USD/PHP Cost as a Percent of the Trading Range

Apart from the profit/loss in a trade, we can even determine the cost variation in altering volatilities. To do so, we have taken the ratio between the volatility value and the total cost and represented it as a percentage.

ECN Model Account

Spread =3 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 3+ 3 = 9

STP Model Account

Spread = 4 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 4 + 0 = 7

The Ideal way to trade the USD/PHP

Firstly, from the trading range table, we can infer that the volatility of this pair is feeble. But, note that, the small pip movement values do not mean you’ll have to trade large quantities to make a good profit. Since the pip value (per standard lot) is $19.24, even a 0.1 pip will generate $1.924.

Coming to the cost table, the percentages here are too high, especially in the min column. So it is recommended to not trade during low volatilities as It will have high costs. So, to reduce costs, it is ideal to trade when the volatility of the market is on the higher side. As far as the risk involved in highly volatile markets is concerned, you may cut down your lot sizes.

To simplify it even further, you can bring down your costs by executing your trades as limit/stop orders instead of market orders. This eliminates the slippage involved in the calculation of total costs on the trade.

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Forex Assets

Analyzing the USD/CNH Forex Currency Pair

Introduction

USDCNH is the tick symbol for the US Dollar versus the Chinese Yuan. This Asian currency pair is classified as an emerging currency pair. Here, the US Dollar is the base currency, and the CNH is the quote currency.

Understanding USD/CNH

The price of this pair as a whole determines the value of CNH equivalent to one USD. It is quoted as 1 USD per X CNH. For example, if the price of this pair currently is 6.4728, then these many Yuans are required to buy one US Dollar.

Spread

The spread is the difference between the bid price and the ask price of a currency pair. Since the bid and ask price is set by the brokers, spread varies from broker to broker. The approximate spread on ECN and STP accounts is given below.

ECN: 23 pips | STP: 24 pips

Fees

A fee is nothing but the commission that is paid to the broker on each trade. This, too, is different from broker to broker. The fee on STP accounts is nil, while there are few pips of fee for ECN accounts.

Slippage

Slippage is another type of fee which is applied for market orders. It is a pip difference between the price requested by the trader to be executed and the price that is actually given to the trade. There is this difference due to the market’s volatility and the broker’s execution speed.

Trading Range in USD/CNH

With the table given below, one can assess their risk on each trade. This table represents the range of pip values from minimum to maximum for different timeframes. Multiplying this with the value per pip yields the amount one will be risking on their trade.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can determine a large period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

USD/CNH Cost as a Percent of the Trading Range

The trading range values can be used to determine the variation in the costs of the trade for different volatilities as well. Below are two tables (for ECN and STP) that depict how the cost varies as the volatility and timeframes are changed.

ECN Model Account

Spread = 23 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 23 + 3 = 29

STP Model Account

Spread = 24 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 24 + 0 = 27

The Ideal way to trade the USD/CNH

This currency pair is a little, unlike the other emerging currency pairs. As in, it has pretty good liquidity and volatility. It is comparable to a cross-currency pair. So, it can be traded in a similar way how to cross currencies are traded.

From the table, we can ascertain that the magnitude of the percentages is higher for lower volatilities and comparatively lower for high volatilities. And the median costs lie in an average column.

If you are a trader who requires low costs, then you will have to bear with the high volatility. Or if you’re a trader who needs low volatility, then you must be able to bear with high costs. Finally, traders who wish to have a balance between the two, then they may trade during those times when the volatility is around the average values (in the trading range table).

Inculcating strategies that require limit order and not market orders can help reduce costs significantly. This is because limit orders do not consider the slippage factor in calculating the total costs. That is, in our example, the total cost of each trade would reduce by three pips.

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Forex Assets

Analyzing The USD/NOK Exotic Forex Currency Pair

Introduction

USD/NOK is the abbreviation for the US Dollar against the Norwegian Krone. This pair comes under the classification of exotic currency pairs. In this pair, USD is the base, and NOK is the quote currency.

Understanding USD/NOK

The value of USDNOK determines the value of NOK that is equivalent to one US Dollar. It is quoted as 1 USD per X NOK. So, if the market value of this pair is 9.2913, then these many units of Norwegian Krone are required to buy one US Dollar.

Spread

Spread is the difference between the bid price and the ask price in the market. This difference is the revenue for the brokers. Spread typically varies on how the broker executes the trades. The approximate spread on ECN and STP accounts is given below.

ECN: 13 pips | STP: 15 pips

Fees

The commission that a broker charges their clients is referred to as the fee. This is not constant and varies from broker to broker. The fee on ECN accounts is around 5-10 pips, and on STP accounts, it is nil.

Slippage

Slippage is the difference between the trader’s demanded price and the actual executed price. Market volatility and the broker’s execution speed are the reasons for slippage to occur.

Trading Range in USD/NOK

A trading range is the tabular representation of the minimum, average, and maximum pip movement in a currency pair. Below are the values of USDNOK that help us assess the profit/loss one can incur in a trade.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can determine a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

USD/NOK Cost as a Percent of the Trading Range

Here we take the ratio of the total cost on the trade and the volatility values and represent them in percentages. These percentages are then used to determine the cost variation in trade in different timeframes.

ECN Model Account

Spread = 13 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 3 + 13 + 3 = 19

STP Model Account

Spread = 15 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 3 + 15 + 0 = 18

The Ideal way to trade the USD/NOK

In this section, we interpret what the above percentages actually mean and how to make use of it.

The magnitude of the percentages represents how high or low are the costs of trade. So the higher the values, the higher is the cost and vice versa. From the table, it can be ascertained that the costs are pretty on the higher in the min column. This means that the costs are high when the market’s volatility is low. But it is not ideal to trade during these times due to high costs.

To have an equilibrium on costs as well as volatility, it is perfect for entering during those times when the volatility of the current market is around the average values.

Now, if you still wish to reduce your costs, you may trade using limit orders instead of market orders. This will completely nullify the slippage on the trade and hence bring down the total cost as well.

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Forex Assets

Understanding The USD/THB Exotic Forex Pair

Introduction

USD/THB is the abbreviation for the US Dollar versus Thailand’s Thai Baht. It is an exotic currency pair which usually has high volatility and low trading volume. US Dollar, in this pair, is the base currency, and the Thai Baht is the quote currency.

Understanding USD/THB

The value of USDTHB represents the number of THB that are equivalent to one USD. It is quoted as 1 USD per X THB. So, if the market price of this pair is 30.98, then one has to produce 30.98 THB to buy one USD.

Spread

Spread is the difference between the bid and the ask price of the currency pair set by the brokers. It typically varies from broker to broker and also from the type of order execution. The spreads on ECN and STP accounts are as shown below.

ECN: 10 pips | STP: 11 pips

Fees

There is a fee associated with every trade you take. The fee is also referred to as the commission on the trade. Its value is usually a constant but varies from the type of execution model. The fee on STP accounts is nil, while there are a few pips of fee on ECN accounts.

Slippage

Slippage is the difference between the trader’s required price and the price at which his trade was executed. Since exotic pairs are highly volatile, the slippage is quite high.

Trading Range in USD/THB

Below we shoe a table representation of the minimum, average, and maximum pip movement in a currency pair. These values help us determine the profit or loss that can be made on a trade in a given amount of time. All you have to do is, multiply any one of the below values with the value per pip ($32.26). The result is the potential profit gained or lost on the trade for one bar of the timeframe.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

USD/THB Cost as a Percent of the Trading Range

The cost as a trading range represents the cost variation in trade in different volatilities of the market. It is presented in percentages of the total range. Thus, it helps determine the best moments to enter the market to ensure lower costs.

ECN Model Account

Spread = 10 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 10 + 3 + 3 = 16

STP Model Account

Spread = 11 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 11 + 3 + 0 = 14

The Ideal way to trade the USD/THB

Trading exotic pairs are different from trading the major and minor pairs. However, there are times when one can trade this pair by making attempts to reduce the costs.

The magnitude of the percentages represents the costs of the trade. The higher the percentages, the higher are the costs on the trade. It can be seen from tables that the costs are high on the min column and comparatively lower in the max column. This clearly means the costs are high during high volatilities and vice versa.

However, when it comes to determining the right time to trade, one must trade during those moments when the volatility is around the higher values because this will ensure pretty great volatility as well as low costs.

Furthermore, another simple way to reduce costs is by trading using limit/stop orders instead of market orders. Limit orders will eliminate the slippage and significantly reduce the total cost of the trade.

Finally, we can see that we must be pretty sure of the direction and extension of the trend to trade the USDTHB, and avoid trading it intraday. Using the daily chart and limit orders, we still would need almost 4 Hours of a positive movement (with the trade) to pay the costs. Therefore we practical setups would ask for at least 2-3 days of market action for propper reward-to-risk factors.

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Forex Assets

Analyzing The USD/SGD Forex Currency Pair

Introduction

US dollar versus the Singapore dollar, in short, is referred to as USDSGD. USD stands for the US dollar and is the base currency, and SGD stands for the Singapore dollar and is the quote currency. This currency pair comes under the sack of exotic currency pairs. Unlike the major and minor currencies, exotic currencies tend to have high volatility and low volumes.

Understanding USD/SGD

Comprehending the value of USDSGD is simple. The number of SGD equivalent to one USD is the value of the currency pair USDSGD. It is quoted as 1 USD per X SGD. So, if the value of this pair is 1.3641, then 1.3241 units of SGD are to be produced to purchase one USD.

Spread

Spread is a term given to the difference between the bid price and ask price of a currency pair. This value varies from broker to broker and on the type of execution model.

ECN: 7 | STP: 9

Fees

The fee is similar to the commission that is paid on each trade. This value, too, varies based on how the brokers execute a trade. Note that there is no fee on STP accounts. However, there is a fee on ECN accounts. And for exotic pairs, the fee is pretty high.

Slippage

Slippage is the difference between the price that a trader expected to receive and the price he actually got. There is always this difference due to the volatility of the market and the broker’s execution speed.

Trading Range in USD/SGD

Assessing the profit or loss that a trader is liable for is considered to be a vital factor in trading. This can easily be determined using the table below, which represents the pip movements in the currency pair in a given timeframe.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

USD/SGD Cost as a Percent of the Trading Range

The total cost on a trade does not remain static even though you’re trading with the same broker. It varies depending on the volatility of the currency pair. To find the variation of these costs, we consider the values in the pip movement table and find the ratio with the total cost, and represent in percentage.

ECN Model Account

Spread = 7 | Slippage = 3 |Trading fee = 3

Total cost = Slippage + Spread + Trading Fee = 7 + 3 + 3 = 13

STP Model Account

Spread = 9 | Slippage = 3 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 9 + 3 + 0 = 12

The Ideal way to trade the USD/SGD

As mentioned, exotic pairs are pretty expensive to trade. However, it can still be traded in some moments when the costs are low.

It can be ascertained from the above table that the percentages are maximum in the min column and minimum on the max column. This means that the costs are high when the market’s volatility is low and vice versa.

Now, to ensure moderate volatility with affordable costs, it is ideal to trade when the volatility of the market is somewhere around the average values of the volatility table.

Slippage is a variable in the total cost that can be erased by trading using limit orders instead of market orders. In doing so, the costs will be reduced by a significant value. For example, if the total cost on the trade was 13 (including slippage=3), then the costs would be reduced to 10 as slippage is not considered.

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Forex Assets

AUD/NZD – Everything About This Forex Currency Pair

Introduction

AUD/NZD is derived from the full-form of the currency pair, the Australian dollar, and the New Zealand dollar. It comes under the classification of cross currency pairs. In this pair, AUD is the base currency, and NZD is the quote currency.

Understanding AUD/NZD

The value of AUD/NZD depicts the value of NZD that is equivalent to AUD. It is simply quoted as 1 AUD per X NZD. For example, if the current value of this pair is 1.0405, then these many New Zealand dollars are needed to purchase one Australian dollar.

AUD/NZD Specification

Spread

Spreads are a typical way through which brokers make money. The pip difference between the bid price and the ask price is their profit margin, which is referred to as the spread. It varies from the type of account model.

ECN: 0.9 | STP: 1.8

Fees

The fee is basically the commission on a trade levied by the broker on each trade. Again, it varies from the type of account model.

Fee on STP = 0

Fee on ECN = 6 to 10 pips (starts from as low as one pip)

Slippage

The slippage is the difference between the broker’s executed price and the trader’s execution price. There is this variation as the order is executed using market execution. There are two reasons for slippage to take place.

  • Broker’s execution speed
  • Market’s volatility

Trading Range in AUD/NZD

Assessing the profit/risk is a great add-on to one’s trading analysis. With this, the trader can know how long he must before his trade performs. And below is the table that enables the analysis of it.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

AUD/NZD Cost as a Percent of the Trading Range

This is one great application of the above table. By combining these values with the total cost of trade, one can determine variations in the costs by varying the parameters like volatility and timeframe.

ECN Model Account

Spread = 0.9 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 0.9 + 1 = 3.9

STP Model Account

Spread = 1.8 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.8 + 0 = 3.8

The Ideal way to trade the AUD/NZD

Before getting into finding the best way to trade this pair, let us comprehend what the above table has got to say.

The higher the magnitude of the percentages, the higher is the cost on the trade for that particular volatility and timeframe. The min column represents low volatility, and the max column represents high volatility.

It can clearly be ascertained from the table that the percentages are comparatively higher on the min column and lower on the max column. This means that the costs are high when volatility is low and vice versa.

But, it is not ideal to trade in neither of the two situations mentioned below.

When the volatility is high -> because of the risk involved
When the volatility is low -> because the costs are high

Now, to maintain a balance between all the parameters, it is best to trade when the pip movement is around the average values.

Furthermore, another simple way to reduce cost is by trading using a pending/limit order instead of market orders, as it will nullify the slippage on the trade. And this, in turn, will reduce the total cost of the trade as well.

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Forex Assets

What Should You Know Before Trading The NZD/JPY Currency Pair

Introduction

NZDJPY, or the NZD/JPY or the New Zealand dollar against the Japanese yen, is a cross-currency pair in the Forex market. The left currency (NZD) represents the base currency, and the one the right (JPY) represents the quote currency.

Understanding NZD/JPY

The market value of NZDJPY is a value of JPY that is required to buy one NZD. It is quoted as 1 NZD per X JPY. For example, if the CMP (current market price) of NZDJPY is 72.657, then it takes 72.657 yen to buy one New Zealand dollar.

NZD/JPY Specification

Spread

Spread is the difference between the bid price and the ask price controlled by the broker. It varies across brokers and their type of execution.

ECN: 0.8 | STP: 1.7

Fees

On every trade a trader takes, there are few pips of fee on it. And this is only on ECN accounts because the fee on STP accounts is nil.

Slippage

Slippage, which happens on market orders, is the difference between the price asked by the client and the price he actually received. There are two primary reasons for it, namely, the broker’s execution speed and the change in volatility of the market.

Trading Range in NZD/JPY

The average, minimum, and maximum pip movement is determined in the trading range table. This comprehensive table helps traders assess the profit they can generate and loss they can incur in a given timeframe. Moreover, this table is helpful in analyzing the cost variation in a trade, which shall be discussed in the next section.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

NZD/JPY Cost as a Percent of the Trading Range

The cost of a trade is not the same throughout the trading day. It varies based on the volatility of the market. Hence, it is necessary to know during what times the cost is high and what times it is low. This could be found out from the table illustrated below.

ECN Model Account 

Spread = 0.8 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 0.8 + 1 = 3.8

STP Model Account

Spread = 1.7 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.7 + 0 = 3.7

The Ideal way to trade the NZD/JPY

The magnitude of the cost percentage is directly proportional to the cost of a trade. So, the higher the value of the percentage, the higher is the cost of a trade. From the table, it can be observed that the cost is highest in the min column compared to the other two columns. This means that the costs are highest when the volatility of the market is low and vice versa, irrespective of the timeframe you’re trading. It is neither ideal to trade when the volatility of the market is high, nor when the costs are high. The average column is on the one we focus on. Trading when the volatility is at the average value is when you can expect moderate volatility and decent costs.

Also, you may reduce your costs by trading using limit or pending orders instead of market orders. This will bring the slippage to ground zero. This, in turn, will reduce the total cost of the trade as well. An example of the same is illustrated below.

Spread = 1.7 | Slippage = 0 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 0 + 1.7 + 0 = 1.7

Hence, it is seen that the costs have reduced by around 50% of the previous value.

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Forex Assets

Understanding The Basics Of NZD/CHF Forex Pair

Introduction

NZDCHF is a cross-currency pair in the Forex market. It is an abbreviation for the New Zealand dollar and the Swiss franc. Here, NZD is the base currency, and CHF is the quote currency.

Understanding NZD/CHF

The value of NZDCHF simply represents the units of CHF equivalent to one unit of NZD. It is quoted as 1 NZD per X CHF. For example, in the market, if the price of NZDCHF is 0.64535, then it requires those many units of CHF to buy one NZD.

NZD/CHF Specification

Spread

The bid price and ask price in the market is typically not the same. The difference between these two prices is referred to as the spread. And this difference amount is used by the broker. It varies from the type of account model.

ECN: 1.1 | STP: 1.9

Fees

The fee is basically the commission that has to be paid on each trade you take. It varies from broker to broker and their execution type. Typically, there is no fee on STP accounts, but a few pips on ECN accounts.

Slippage

Another type of fee traders have to bear is the slippage. It is the difference between the trader’s requested price and the broker’s executed price. Slippage always is changing due to the ups and downs in market volatility and the broker’s execution speed.

Trading Range in NZD/CHF

Many novice traders randomly take trades without determining the amount they’re going to risk. The trading range is that representation, which indirectly illustrates the risk and profit area in a trade, in a given time frame. For example, if the average pip movement on NZDCAD on the 4H timeframe is 20 pips, then the trader will be risking $205.4 in an hour on an average.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

NZD/CHF Cost as a Percent of the Trading Range

Apart from knowing the profit/loss that can be made from a trade in a given time, it is also necessary to know the cost variation in different volatilities and timeframes. Below is a table representing the cost as a percentage that is obtained by considering the volatility, timeframe, and the total cost on a trade.

ECN Model Account 

Spread = 1.1 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 1.1 + 1 = 4.1

STP Model Account

Spread = 1.9 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.9 + 0 = 3.9

The Ideal way to trade the NZD/CHF

Trading on any timeframe and during any volatility is not an efficient way of trading. There are specific times in the market when you must enter/exit. This can be determined from the above two tables. Firstly, the higher the magnitude of the percentage, the higher is the cost of a trade for that particular timeframe and volatility. It can be ascertained from the table that the costs are low for high volatilities and high for low volatilities. And neither of the two states is ideal to trade. To keep your cost affordable and volatility moderate, it is ideal to trade when the volatility is nearby the average values.

Furthermore, it is recommended to have strategies that enable the use of limit orders. Because trading with limit orders will completely cut off the slippage on the trade Nullifying it, the total cost will significantly reduce, which, in turn, will reduce the cost percentage as well. For example, it was observed that cost percentages were reduced by about 50% when the slippage was removed.

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Forex Assets

What Should You Know Before Trading The NZD/CAD Currency Pair

Introduction

NZDCAD is the abbreviation for the currency pair New Zealand dollar against the Canadian dollar. It is referred to as a cross-currency pair. Here, NZD is the base currency, and CAD is the quote currency. In this article, we shall be going over everything you need to know about this currency. Firstly, let’s get started by understanding what the value of NZDCAD depicts.

Understanding NZD/CAD

Comprehending the value of a currency pair is simple. The value of NZDCAD determines the Canadian dollars that must be paid to buy one New Zealand dollar. It quoted as 1 NZD per X CAD. For example, if the current value of NZDCAD is 0.86595, then 0.86595 CAD is required to purchase one NZD.

NZD/CAD Specification

Spread

Spread is the primary way through which brokers make revenue. They have a different price for buying and selling. The difference between these prices is called the spread. It varies from broker to broker and their execution type.

ECN: 1 | STP: 1.8

Fees

For every execution, there is a fee levied by the broker. This fee is also referred to as the commission on a trade. It is nil on STP accounts. And on ECN accounts, it is usually within 6 to 10 pips.

Slippage

Slippage is the variation in the price executed by you and the price you actually received. It happens on market orders. Slippage depends on two factors:

  • The volatility of the market
  • Broker’s execution speed

Trading Range in NZD/CAD

The trading range is a tabular representation of the pip movement in a currency pair in various timeframes. These values help in assessing the risk-on trade as it determines the minimum, average, and maximum profit that can be made on a trade.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

NZD/CAD Cost as a Percent of the Trading Range

Cost a percentage of the trading range is an excellent application of the above table. By manipulating the values with the total cost, the variations in costs in different at different volatilities and timeframes can be calculated. For this, the ratio between the total cost and pip movement is found out and represented in percentage.

ECN Model Account 

Spread = 1 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 1 + 1 = 4

STP Model Account

Spread = 1.8 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.8 + 0 = 3.8

Comprehending the above tables

There are two variables here, namely, timeframe and volatility. By varying these two, the variation in the total cost is examined. Note that the higher the percentage, the higher is the cost on a trade and vice versa. From this, we can make out that the prices are high when the volatility is low. And prices are low when volatility is high. Also, as the timeframe widens, the cost decreases.

The Ideal way to trade the NZD/CAD

It is not ideal to trade when the volatility is high, as it is risky. It is also not the best choice to trade when the volatility is low, as the costs are high. So, to keep a balance between both volatility and cost, it is ideal to trade when the pip movement of the pair is around the average values.

Talking about timeframes, trading the 4H or the Daily would be great, as the cost is bearable, and the trade wouldn’t take too long to perform as well.

Another simple hack to reduce cost is by trading using limit/pending orders instead of market orders. This will significantly reduce costs on a trade because the slippage on the trade becomes 0. It is observed that the cost reduces by about 50% of the original value. Below is a table representing the cost percentage when the slippage is made zero.

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Forex Assets

Everything You Should Know About GBP/NZD Forex Pair

Introduction

GBPNZD is the abbreviation for the Great Britain pound against the New Zealand dollar. Here, the pound is the base currency, while the New Zealand dollar is the quote currency. Though it is not a major currency, it has considerable volatility and liquidity.

Understanding GBP/NZD

The value of GBPNZD represents the value of NZD equivalent to one pound. It is quoted as 1 GBP per X NZD. For example, if the value of GBPNZD is at 1.9677, then to buy one pound, the trader has to pay 1.9677 NZ dollars for it.

GBP/NZD Specification

Spread

Spread is the medium through which brokers generate revenue. They set two different prices for buying and selling a currency pair. The difference between the prices is their profit. This difference is referred to as the spread. The prices usually vary from type of account model.

ECN: 1.2 | STP: 2.1

Fees

The fee is basically the commission on each trade a trader must pay. Typically, there is no fee on STP accounts, but a small fee on ECN accounts. The fee is usually between 6 and 10 pips.

Slippage

Slippage takes place when positions are opened/closed using market orders. The trader wishes to pay a specific price, but in reality, he receives a different price. And the difference between these two prices is called slippage.

Trading Range in GBP/NZD

The trading range is the depiction of the pip movement of a currency pair on different timeframes. With it, one can analyze how many dollars they can win/lose in a given timeframe. For example, if the average pip movement on the 1H timeframe is 30 pips, then you will either be in a profit of $198.6 or a loss of $198.6 in an hour. Knowing this, a trader can plan their lot sizes accordingly.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

GBP/NZD Cost as a Percent of the Trading Range

Having knowledge of the cost of the trade is necessary. Note that the cost varies based on the volatility and the timeframe traded. So, it becomes vital to know when the right moments to enter the market are. Below are two tables illustrating the total costs as a percentage for varying timeframes and volatility.

ECN Model Account

Spread = 1.2 | Slippage = 2 |Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 1.2 + 1 = 4.2

STP Model Account

Spread = 2.1 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 2.1 + 0 = 4.1

The Ideal way to trade the GBP/NZD

The above tables show that the costs are high in the min column and low in the max column. The higher the value of the percentage, the high is the cost. So, this means that the costs are high for low volatility markets and vice versa. It is neither ideal to trade during low volatility nor during high volatility. To have an equilibrium between the costs and the volatility, it is best to enter the market when the volatility is around the average mark.

Slippage is a parameter for calculating the total cost. It has a great weight in the total cost. However, there is a way to minimize and nullify it. This can be simply be done by trading using limit orders instead of market orders.

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Forex Assets

Asset Analysis – EUR/NZD Forex Currency Pair

Introduction

EURNZD is the abbreviation for the Euro area’s euro and the New Zealand dollar. It is classified under the minor/cross currency pairs. In EURNZD, EUR is the base currency pair, and NZD is the quote currency. As a matter of fact, in all currency pairs with euro in it, EUR is the base currency.

Understanding EUR/NZD

The value of this pair defines the New Zealand dollars required to purchase one euro. It is quoted as 1 EUR per X NZD. For example, if the value of value in the market is 1.6650, it implies that to buy one euro, the trader has to pay 1.6650 New Zealand dollars for it.

EUR/NZD Specification

Spread

Spread is a very popular term in the forex industry. This is the way through which the broker makes revenue. Spread is simply the difference between the bid price and the ask price. It differs from the type of account model. The spread on ECN and STP is given below.

ECN: 0.9 | STP: 1.7

Fees

For every position that a trader opens, there is some fee associated with it. And it depends on the type of account model. It is seen that there is no fee on STP accounts and a few pips on ECN accounts.

Slippage

Slippage is the difference between the price the trader had demanded and the actual price the trade was executed. Slippage happens when trades are taken using market orders. Slippage has a significant load on the total cost of the trade. More on this shall be discussed towards the end of this article.

Trading Range in EUR/NZD

A part of the analysis in trading is knowing the volatility of the market. Volatiltiy will give an close idea on the number of pips the currency pair will move in a given timeframe. The trading range depicts the minimum, average, and maximum pip movement in a specified time frame. Below are the values for EUNZD.

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

EUR/NZD Cost as a Percent of the Trading Range

Cost as a percent of the trading range represents the cost percentage that a trader is bearable for each trade they take. The percentage is obtained by finding the ratio between the total cost and volatility. With these percentage values, we come into the conclusion of the best time to enter and exit the market with minimal costs.

ECN Model Account 

Spread = 0.9 | Slippage = 2 | Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 0.9 + 1 = 3.9

STP Model Account

Spread = 1.7 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.7 + 0 = 3.7

The Ideal way to trade the EUR/NZD

By analyzing the percentages obtained above, we can find ways to reduce risk and cost on every trade of EURNZD. Firstly, the percentage tells the cost variation for different volatilities in different timeframes. The values are large in the first (Min) column. Meaning, the costs are high in the min column. Also, since this column represents low volatility, it implies that costs are high when the volatility is low and vice versa. In the average column, the costs are neither too high nor too low. And the volatility is under balance as well. Hence, this turns out to be the ideal time to trade in the market.

Moreover, another feasible technique to reduce cost is by placing limit orders. By the use of limit orders, a trader will eradicate the existence of slippage on the trade, and, in turn, reduce the total cost on the trade considerably. An example of the same is given below.

Comparing this table with the previous table, it is evident that the percentages have almost halved. Hence, entering and exiting trades using limit orders can prove to be very advantageous to reduce costs on trade.

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Forex Assets

Understanding The Fundamentals Of USD/JPY Forex Pair

Introduction

USDJPY is the abbreviation for the currency pair US dollar against the Japanese yen. This currency pair is very liquid and volatile. It is classified as a major currency pair. Here, USD is the base currency, and JPY is the quote currency. The currency pair shows how many JPY are required to purchase one US dollar.

Understanding USD/JPY

The exchange rate of USDJPY represents the units of JPY equivalent to one US dollar. For example, if the value of USDJPY is 109.550, then these many Japanese yen are required to buy one US dollar.

USD/JPY Specification

Spread

Spread is simply the difference between the bid price and the ask price. It depends on the account type. The average spread for ECN and STP account is shown below.

Spread on ECN: 0.5

Spread on STP: 1.2

Fees

The fee is basically the commission charged by the broker on each trade. Typically, the fee on STP accounts is nil, and there is some fee on the ECN account. There is no fixed fee on the ECN account and varies from broker to broker.

Slippage

Slippage is the difference between the price needed by the trader and the real price the trader was executed. Slippage happens when orders are executed as market orders. The slippage is usually within the range of 0.5 to 5 pips.

Trading Range in USD/JPY

The trading range is the representation of the minimum, average, and maximum volatility on a particular timeframe. It shows the range of pips the currency pair moved on a given timeframe. These values prove to be helpful in assessing a trader’s risk and controlling their cost on a trade.

USD/JPY PIP RANGES

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

USD/JPY Cost as a Percent of the Trading Range

Just knowing how many pips the currency pair moved is pointless. To bring it some value, it is clubbed with the total cost to understand how the cost varies based on the volatility of the market. It shows cost and volatility are dependent on each other.

The relation between Cost and Volatility

Cost and volatility are inversely proportional to each other. When the volatility of the market is low, the costs are high; and when the volatility is high, the cost is low. More on this is discussed in the subsequent section.

ECN Model Account

Spread = 0.5 | Slippage = 2 | Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 0.5 + 1 = 3.5

STP Model Account

Spread = 1.2 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.2 + 0 = 3.2

The Ideal way to trade the USD/JPY

The above two tables are formed by finding the ratio between the total cost and the volatility. It is then expressed in terms of a percentage. Comprehending the values is simple. It is based on the relation between cost and volatility. If the percentage value is high, then the cost is high for that particular volatility and timeframe. It can be inferred that the min column has the highest values compared to the average and max column. This simply means that the costs are high when the volatility of the market is low. Hence, it is recommended to open/close positions when the volatility is at or above the average mark.

Furthermore, apart from volatility, the cost is heavily affected by the slippage. As mentioned, this happens due to market order executions. Hence, to reduce your cost by up to 50% on each trade, it is recommended to trade using limit orders and not market orders.

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Forex Assets

USD/CHF Currency Pair – Everything You Should Know!

Introduction

USD/CHF is the abbreviation for the US dollar and the Swiss franc. This pair is a major currency pair. USD is the base currency, while CHF is the quote currency. The pair as a whole tells how many units of the quote currency is needed to purchase one unit of the base currency. Trading USDCHF is as good as saying, trading the ‘Swissie.’

Understanding USD/CHF

The exchange value of USDCHF represents the number of Swiss francs required to buy one US dollar. For example, if the value of USDCHF is 0.9820, to purchase one USD, the trader must pay 0.9820 Swiss francs.

USD/CHF Specification

Spread

Spread in trading is the difference between the bid price and the ask price offered by the broker. It is measured in terms of pips and varies on the type of account and type of broker.

Spread on ECN: 0.8

Spread on STP: 1.6

Fees

There is a small fee or commission charged by the broker for every trade a trader takes. This depends on both types of accounts and broker. For our analysis, we have kept the fee fixed at one pip.

Slippage

Due to volatility in the market, a trader does not usually get the price that he demanded. The actual price differs from the demanded price. This difference is referred to as slippage. For example, if a trader executes a trade at 0.9890, the real price received would be 0.9892. This difference of two pips is known as slippage.

Trading Range in USD/CHF

The trading range is a tabular representation of the minimum, average, and maximum pip movement on a particular timeframe. Having knowledge about this is necessary because it helps in managing risk as well as determining the right times of the day to enter and exit a trade with minimal costs.

Below is a table that depicts the minimum, average, and maximum volatility (pip movement) on different timeframes.

USD/CHF PIP RANGES

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

USD/CHF Cost as a Percent of the Trading Range

The number of pips the currency pair move in each timeframe is shown in the above table. Now, we apply these values to find the cost percentage when the volatility is minimum, average, and max. This cost percentage will then help us filter out the most optimal time of the day to take trades.

The comprehension of the cost percentage is simple. If the percentage is high, then the cost is high for that particular timeframe and range. If the percentage is low, then the cost is relatively low for that timeframe and range.

Note that, the total cost on a single trade is calculated by adding up the spread, slippage, and trading fee.

ECN Model Account

Spread = 0.8 | Slippage = 2 | Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 0.8 + 1 = 3.8

STP Model Account

Spread = 1.6 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.6 + 0 = 3.6

The Ideal way to trade the USD/CAD

Entering and exiting trades during any time of the day might not be the smartest move. There are particular times of the day a trader must manage their trade to reduce both risk and cost on the trade. This can be made possible by comprehending the above two tables.

The percentages are highest in the min column. Meaning, the cost is pretty high when the volatility of the market is low. For example, on the 1H timeframe, when the volatility is 2.5 pips, the cost percentage is 152%. This means that one must bear high costs if they open or close trades when the volatility is around 2.5 pips. So, ideally, it is recommended to trade when the market volatility is above the average mark.

Apart from that, it is much better if one trades using the limit orders rather than market orders, as it nullifies the slippage on the trade. In doing so, the costs of each trade will reduce by about 50%.

Categories
Forex Assets

Everything You Should Know To Trade The GBP/USD Forex Pair

Introduction

Currency pairs are classified as major, minor, exotic, etc. Major currencies pairs are those pairs that involve the US dollar as one of the currencies. These currencies typically have high liquidity and volatility. GBPUSD is one such example. It is the currency pair where Great Britain Pound is traded against the US dollar.

In this article, we shall be covering all the basic fundamentals which are essential to know before trading this pair. And before getting into the specifications of this pair, let us first understand what actually the price of GBPUSD signifies.

In GBPUSD, GBP is the base currency, and USD is the quote currency. The value (price) of the pair determines the units of USD required to purchase one unit of GBP. For example, if the current value of GBPUSD is 1.3100, then the trader must possess the US $1.3100 to buy 1 Pound.

GBP/USD Specification

Spread

Spread is simply the difference between the bid price and the ask price. The spread depends on the type of account.

Spread on ECN: 0.7

Spread on STP: 1.3

Fees

Again, the fee depends on the type of account. Typically, there is no fee charged by STP accounts. There is a trading fee on ECN account, which depends from broker to broker.

Slippage

Forex is very liquid and volatile. Hence, this causes slippage. Slippage is the difference between the price requested by the trader and the actual price the trader received. And this depends on the broker’s execution speed and volatility of the market. The slippage in major currency pairs is usually within 0.5 and 5 pips.

Trading Range in GBPUSD

As a trader, it is vital to know the number of pips a currency pair moves in a period of time. This is basically the volatility in the currency pair. And volatility is one of the factors which are helpful in risk management.

The volatility is measured in terms of percentage or pips. For example, if the volatility on the 1H timeframe of GBPUSD is 15 pips, then one can expect to gain or lose $150 (15 pip x $10 per pip) within a time period of few fours.

Below is a table that depicts the minimum, average, and maximum volatility (pip movement) on different timeframes.

EUR/USD PIP RANGES

Procedure to assess Pip Ranges

  1. Add the ATR indicator to your chart
  2. Set the period to 1
  3. Add a 200-period SMA to this indicator
  4. Shrink the chart so you can assess a large time period
  5. Select your desired timeframe
  6. Measure the floor level and set this value as the min
  7. Measure the level of the 200-period SMA and set this as the average
  8. Measure the peak levels and set this as Max.

(originally posted in our article here)

GBPUSD Cost as a Percent of the Trading Range

A Forex broker usually levies three type of charges for each trade. They are:

  • Slippage
  • Spread
  • Trading Fee

The sum of all the three costs will generate the total trading cost for one trade.

Total cost = Slippage + Spread + Trading Fee

Note: All costs are in terms of pips.

To bring up an application to the above volatility table, we bind these values with the total cost and find the cost variations (in terms of percentages) on different timeframes. And these percentages prove to be helpful in choosing the right timeframe with minimal costs.

ECN Model Account

Spread = 0.7 | Slippage = 2 | Trading fee = 1

Total cost = Slippage + Spread + Trading Fee = 2 + 0.7 + 1

Total cost = 3.7

STP Model Account

Spread = 1.3 | Slippage = 2 | Trading fee = 0

Total cost = Slippage + Spread + Trading Fee = 2 + 1.3 + 0

Total cost = 3.3

The Ideal Timeframe to Trade GBPUSD

Above are tables that illustrate the cost ranges in terms of percentage. Let us now comprehend the tables and figure out the ideal timeframe to trade this currency pair. From the above table, it is evident that the cost is highest (74% and 66%) in the 1H timeframe when the volatility is low. Hence, it is not ideal to pick the 1H timeframe when the volatility is around 5 pips (minimum).

On the flip side of things, the cost percentages are minimal on the 1M timeframe. Traders with a long term perspective on the market can invest with minimum costs.

Intraday traders, on the other hand, can pick the 1H, 2H, 4H, or the 1D timeframe when the volatility of the market is above average.

Another point to consider is that slippage eats up the costs significantly. So, it is recommended to plan strategies that involve placing of limit orders and not market orders.

As proof, below is a table that clearly shows the reduction in the cost percentages when the slippage is made NIL.

Total cost = Slippage + Spread + Trading fee = 0 + 0.7 + 1

Total cost = 1.7

Comparing these values to the table with slippage=2, it can be ascertained that the cost percentage has reduced by a considerable amount. Hence, all in all, it is ideal to trade by placing limit orders rather than executing at the market price.

Categories
Forex Market Analysis

Bullish Economy at a Crossroad: Free Trade against Protectionism

 

 

 


Underlying Events


Last week’s volatility was fueled early Monday by Italy’s political instability as Italian president Sergio Mattarella refused to appoint Giuseppe Conte, a Eurosceptic, as Finance Minister even though he has the backing of the majority of the parliament.

Then, on May 30, as fears about Italy eased the markets focused its attention on EU officials statements against the US imposed tariffs on steel and aluminium.

“The US is playing a dangerous game by slapping tariffs on European steel and aluminium,” said Cecilia Malmstrom, warning about the consequences for economic recovery on the EU as well as US industry. (source BBC)

 


 Last week’s Economic Calendar was full of interesting releases


 

US

May’s US Consumer Confidence figure is at its historic highs, at its estimated 128.0 level, non-farm unemployment is at 3.8%, and US GDP (QoQ) grew at 2.2% a tick below estimations, while US Advance Goods Trade Balance was below expectations at -68.2b.

On the consumer front, May 31 brought us the US PCE Core (YoY) that is stable at 1.8%, the Personal Income (APR) stable at 0.3%, and Pending Home Sales (MoM) below expectations at -1.3%, below the expected 0.4%.

On the Energy Front, crude oil inventories were -3620K well below the expected 450k, while the gasoline inventories were 634K, above the expected -1200K

Finally, the USD Manufacturing figures were a bit above expectations, at 58.7 over 58.2 expected.

Eurozone

German retail sales on April (MoM)grew 2.3% well above the expected 0.5% although the yearly figure fell to 1.2% growth, below the expected 1.6%.

On the unemployment front, Germany’s May unemployment change was -11K above the expectations, and the unemployment Claims rate dropped one centile to 5.2%.

Britain’s consumer credit grew to 1.84B, above the expected 1.3B, while the mortgage approvals slightly descended to 62.5K, below the expected 63.2K

Swiss’s main figure this week was its Gross Domestic Product (YoY) for the first quarter at 2.2%, slightly below the expected 2.3%.

Japan:

JPY retail trade (YoY) grew 1.6%, above the expected 1%, while JPY retail sales figure was down -0.8% below the expected 0.2%. Also, JPY industrial production for April was up 2.5%, below the expected 3.6%.

Canada:

Last week BoC kept its interest rate unchanged at 1.25%, as was expected. However, its GDP figure for the first quarter was a disappointing annualised 1.3%, below the expected 1.8%

The overall picture of this economic background is that of a strong US economy, a not so strong Eurozone, and a possible weakening of the Canadian economy. This is especially sensitive as both Europe and Canada have a potential tariffs war against the USA. We also see weakened Japanese industrial production.

All this make us think on the continuation of the strength of the US Dollar and a further weakening scenario for the Euro, the Pound, and the Yen.


Next Week


 

G7

Next week lacks major economic reports and no earnings news, so markets will possibly pay attention to political developments that will fill the headlines, such as President Trump’s trade wars, or the G7 summit by the end of the week in Canada. Mr Trump is expected to arrive on Friday and meet leaders from Germany, UK, France, Italy, and Japan. A statement of the other six members of the group showed their “unanimous concern” about US tariffs.

 

US Trade Data.

To be released on Wednesday (14:30 GMT+2). The forecasted deficit is 50.0 B from 49B in March.

 

China Trade Figures:

To be released in the early hours of Friday. The expectations are for an increase of the surplus figures to $32.5B, higher than last month’s $28.8 B.

It is expected that exports will grow by 6.3% and imports to rise 16%.

 

RBA Policy meeting:

Due on Tuesday early morning, it will likely keep its rates unchanged at 1.5%.

We should also pay attention to the New Zealand GDP release early Wednesday.

 


Technical Analysis


S&P 500

The S&P 500 behave very bullishly on a weekly basis, although it suffered some drawbacks during the week. Technically the price moves inside a very steep upward channel, but right now it is close to a resistance area that matches the opening of a large red candle drawn in March. We need to watch how the price reacts here. If it is crossed next week we see a free path to head for January highs, mid-term.


 

Ehlers Adaptive Moving Average MAMA and cycle indicator show a bullish momentum is developing. The only black cloud in the sky is that the price is facing a strong resistance area.


 

DAX

The weekly chart shows that the DAX and the Euro-zone are not confident of its economic outlook.  The Index has drawn two consecutive bearish candles and we see that it shows descending lows. Its Cycle Indicator also points to the downside.

We have to pay attention next week to the US index because the DAX is correlated to it, but if we only pay attention to the technical outlook, we are more in the side of the bearish scenario.


The daily chart doesn’t change its outlook. We see that the price broke the triangular formation to the downside and tested it three times last week without being able to break it. Last Friday, although the session closed with gains, the inside candle drawn shows indecision and doubt. The most probable scenario is for the DAX to head down to test the support at 12378 level.


 

US Dollar Index

The US Dollar Index weekly chart shows a Spinning Top candle, while Ehlers’ Cycle indicator has changed to bearish. This may indicate that last week’s correction isn’t finished yet and we may look for a test of the Fibo 0.38 or, even to a 50% retracement, although this is less probable.


 

The Dollar Index daily chart’s engulfing candle that happened on May 29 has been challenged but not successfully. The Cycle indicator also points to the bearish side. Therefore our expectation is for more drops next week.


 

This means the Euro and GBP could still be retracing their heavy drops that started mid-May.

 

USDJPY

On a weekly chart the pair made an engulfing candle two weeks ago, and last week it continues moving down toward its support zone, where it bounced sharply up creating a hammer.
The price is moving mainly by its fundamentals, and now it is heading to the resistance area (green rectangle ). We may see the pair moving between those two areas for some time.


Looking at the daily chart, the pair broke the triangle formation to the upside with a large candle. The cycle indicator also points upward.
The target level is at its recent highs.


 

Categories
Forex Market Analysis

USA VS China Trade, Inflation and Quarterly Results

 

Macroeconomic Outlook

Three references for the markets this week

1)      Trade relation between China and USA

  1. Last Friday it was agreed what it could be the beginning of talks that will take time
  2. Rather a constructive agreement than a bad one

2)      Inflation

  1. American inflation is the key variable this week
  2. It is expected to increase to 2.5% from previous 2.4%
  3. Currently is above the 2% target and this creates certain anxiety and can have some effect on bonds
  4. Might consider the option of a lower than expected inflation (<2.4%)
  5. Payrolls data, which was published on Friday, was 2.6% instead of 2.7% moving away from the 3% barrier
  6. The option of a lower inflation rate provides a less stressful outlook

3)      Quarterly Results

  1. Really good so far in the USA
  2. Partly because of the tax reform
  3. EPS had increased to an average of 24,8% when at the beginning it was expected to be around 17%
  4. Good so far too in Europe
  5. More European companies will publish results this week

Hence, bearing in mind a decent agreement between USA and China, the possibility of lower inflation and good corporate results, the markets should bounce and rise a little this week.

Furthermore, if the inflation turns out to be lower, it could be good for bonds and could contribute to a weaker US Dollar wich has increased significantly recently.

 

Technical Analysis

US Dollar Index

Daily Chart

It is possible to appreciate how the US Dollar Index, after tumbling for a couple of weeks, broke all the resistances and increased significantly. The most important resistances generated from its monthly bearish trend have been broken in one strong movement upward. Including, also, its 200-day EMA which is retesting right now. The only significant resistance that is facing now is at the 93.5 which will be the next target leaving some space for a longer run.

EURUSD

Daily Chart

After testing for the third time the bearish trend line on the top it dropped,  strongly breaking its two supports below it. Not only it fell after testing its resistance and breaking the upcoming supports but also, on Wednesday it broke below the third support which is currently retesting. This can be either a fake breakout or another shorting opportunity.

 

GBPUSD

Daily Chart

After breaking the support, which has been holding price during its bullish trend line, it is eyeing the next solid resistance which is at a level of 1.34 more or less. After breaking the 200-day EMA, it is taking a rest. It may either retest the recent support broken which is hard as the bullish trend was really steep or test the next resistance which is closer and extending the bearish move.

 

USDJPY

Daily Chart

The dollar broke both resistances after doing a fake breakout and bouncing back from the monthly support. It has created a small bullish trend in the short term where it can be holding on until it reaches its next target which is the monthly bearish trend, currently situated at a level of 111.5. Either that or starts going sideways for the next days until it breaks one of the monthly trends.

Crude Oil

Daily Chart

Recent geopolitical events and tensions in Syria have created volatility in the markets, and consequently, the price of oil has been on the rise. After holding to the bullish trend line and breaking above $65 it did a retest of the recent resistances it just broke above. Without more resistances ahead, it has just reached the expected target of $70 per barrel. There are not any significant resistance above which leaves the door open for a longer bullish run.

DAX

Daily Chart

It bounced back from the monthly bearish trend which was the strongest one and consequently in the recent run it has just broken both two bearish weekly resistances. Last Friday it closed above the last resistance which leaves the door open for a continuation, possibly at less slow pace, of the recent bullish trend formed from testing the resistances and breaking the supports.

©Forex.Academy

Categories
Forex Market Analysis

market overview for US index & pairs

News

No need to say that that the hour talk now is about hitting Syria by US, France, & Great Britain

Of course, there’s a lot of action going on as U.S. tells UN it’s ready to hit Assad again, if necessary.

Also U.S. Eyes Russia Sanctions for Syria, U.K. Sees One-Time Hit.

UN Ambassador Nikki Haley, speaking Sunday on CBS’s “Face the Nation,” said U.S. Treasury Secretary Steven Mnuchin will announce new sanctions Monday that “go directly to any sort of companies that were dealing with equipment” related to Syrian leader Bashar al-Assad and his chemical weapons.

Oil prices, which already are above their three-year highs, may be about to jump further.

As Brent oil could spike to $80 a barrel if the U.S. and European Union reimpose sanctions on Iran, and as Western powers expand the scope of the Syrian civil war.

 

US Index

S&P500 behaviour has been intensively bearish on Daily frame, with a sideways movement during the last ten weeks.

There are perfectly well-noticed signs indicating that prices will be up active again.

Reversing from the support level at 88.35, bouncing from the uptrend’s  2018 low, and forming a double bottom, which is a reversal pattern, to give shape to a harmonic pattern (crab).

The price is facing a strong resistance test at the down trend lin from the high of May 2017, also with the red resistance zone (90.45-91.65).

If the price successfully breaks these levels, we can see it climbing up to its next zone (92.55-93.9). as it’s 61.8% & 78.6% Fibonacci, B harmonic level, and turn down from the high of 2017.

 EUR/USD

On 1H frame, we can see that the price broke the uptrend line provided by reversing from resistance zone (1.239-1.2425). The most important issue is that it approached the downtrend line traced from 2008 high.

The price draws a triangle that, if broken down, we can easily test the levels 1.23 then 1.226

 

 

GBP/USD

On 1H frame, the pair touched the resistance 1.428, with a megaphone pattern.

The price is expected to visit the 1.42 level to retest it. In case it breaks it, we can see it touching 1.415 and then 1.409

 

NZD/USD

The pair has faced its resistance level at 0.939 by breaking the uptrend line and rising reversal wedge. It’s supposed to retest the uptrend from the low of April at 0.732 then 0.727

Categories
Forex Market Analysis

DAILY ABSTRACT – 13th February 2018

 

Hot Topics:

  • GBP – Waiting for more falls in the Cable.
  • USOIL – Crude Oil is waiting for the issuance of the monthly report of the IEA.
  • DOLLAR – Observing a possible corrective movement.

 

Main currencies daily performance.

 

GBP – Waiting for more falls in the cable.

In a week full of inflation data, we started with the inflation of the United Kingdom. For the month of January, we expect a slight reduction in the CPI from 3.1% to 3.0% (YoY). The level of consensus is above the Bank of England’s (BoE) 2% objective, which at its last meeting of the Monetary Policy Committee, expects a slight downward turn, stabilised at the level projected in the coming months, around 3% in the short term.

Technically, we can see that the Cable is in the middle of a bearish structure that could take us to levels of 1.355 to 1.3448. The invalidation level of this bearish formation is 1.406.

 

GBP-USD 4-hour Chart ( Click image to enlarge)

USOIL – Crude Oil is waiting for the issuance of the monthly report of the IEA.

Yesterday, the monthly report of OPEC was released, where it expects the global demand of Crude Oil to grow to 98.60 mb/d (million barrels/day) in 2018, compared to the demand registered during 2017 that reached 97.01 mb/d. As for the world supply, OPEC estimates that during 2018 it will reach an average of 59.26 mb/d in non-OECD countries and 57.86 in the case of the OECD countries.

As you can see in the chart, we expect the price to reach $57 to start forming a reversal pattern that can take us to the medium-long term target area of $70.

OIL WTI 4-hour Chart ( Click image to enlarge)

DOLLAR – Observing a possible corrective movement.

The Dollar Index <DOLLAR> has developed two bullish impulse movements. From the current zone, we are expecting it to make a slight bearish move to complete a higher grade bullish structure that would take us to the first weekly resistance R1 at 90.823. We should not lose the point of view that the bias is bullish.

US Dollar Index 1-hour Chart ( Click image to enlarge)

Categories
Forex Market Analysis

Daily Abstract – 2nd February 2018

Hot Topics:

  • DOLLAR – BUILDING A SIDEWAYS STRUCTURE BEFORE U.S. EMPLOYMENT DATA RELEASE.
  • FAANG – APPLE, AMAZON AND ALPHABET CLOSE MIXED BEFORE QUARTER EARNINGS RELEASE.
  • CRYPTOS – BTC CONTINUES THEIR SELL-OFF.

 

Main currencies daily performance.

DOLLAR – BUILDING A SIDEWAYS STRUCTURE BEFORE US EMPLOYMENT DATA RELEASE.

We are starting the second month of the year, and as usual, in the first week of every month, the market is expecting the employment data release. Today, the Bureau of Labour Statistics in the US will publish the unemployment rate. It is expected to remain unchanged at 4.1%, while Nonfarm Payrolls’ expected increase is to 184K.

The Index has returned to the past week’s lower values, building a sideways structure. We expect that the volatility generated by the data release could define the market direction.

 

FAANG – APPLE, AMAZON AND ALPHABET CLOSE MIXED BEFORE QUARTER EARNINGS RELEASE.

Alphabet <GOOG> has closed with an advance of 0.8% before the last quarter earnings release, where GOOG has reported an EPS of 9.7 ($/sh.) vs 9.98 ($/sh.) estimated, and a Revenue of 32.32B vs 31.87B expected. Amazon <AMZN> has closed the session with 2.65% of losses after the closing bell. AMZN reported an EPS of 3.75 ($/sh.) vs 1.85 ($/sh.) estimated, and a Revenue of 60.45B vs 59.83B expected. Finally, Apple <AAPL> also closed with losses (0.22%), the earnings reported was an EPS of 3.89 ($/sh.) vs 3.85 ($/sh.) estimated, and a Revenue of 88.3B vs 77.25B expected.

 

CRYPTOS – BTC CONTINUES THEIR SELL-OFF.

As we are forecasting from the Potential Dead Cat Bounce Pattern article, and as has been published yesterday in our Daily Abstract, the crypto-currency Bitcoin is making new lower lows; our vision is that BTC will reach the 8,000 level. BTCUSD falls to November 2017 levels. So far this year, Bitcoin has lost approximately 58.9%.

 

Categories
Forex Market Analysis

Daily Abstract – 1st February 2018

Daily Abstract’s Hot Topics:

  • DOLLAR – FOMC, Federal Reserve maintains an unchanged interest rate at the end of the Yellen age.
  • NZD – Kiwi the best currency performer of the session aided by the investors’ confidence in market conditions.
  • FAANG – AMAZON despite the bullish gap, closes lower  
  • FAANG – GOOGL and AAPL close mixed before the earnings release.
  • CRYPTOS – BTC tests the psychological 10,000 support.

 

Main currencies daily performance.

DOLLAR – FOMC, FEDERAL RESERVE MAINTAIN AN UNCHANGED INTEREST RATE AT THE END OF THE YELLEN AGE.

The Federal Open Market Committee (FOMC) members in their last meeting of the Yellen age have decided to maintain the interest rate unchanged at 1.50%. The labour market has continued to strengthen and economic growth has risen. This meeting has been the end of the Janet Yellen era as chair, next month the chair will be the Republican Jerome Powell, who has been confirmed by the Senate on January 24.

Our vision still considers a probability of turning bullish; if the index consolidates above the weekly pivot, our forecast will have more confidence in selling the Euro <EURUSD>. Additionally, we are positioned to sell the Euro from 1.250 level (see long-term pick EURUSD Watching the Weekly F38.2 )

US Dollar Index 1-hour chart ( click on the image to enlarge)

 

EUR-USD 30-min chart ( click on the image to enlarge)

 

NZD – INVESTORS’ CONFIDENCE IN MARKET CONDITIONS THE BOOST KIWI.

Favourable market conditions are boosting New Zealand’s agro-industry; the central factor has been the increase of the dairy products exports. Dairy products and their derivatives are the most relevant contributors to exports, about 95% of New Zealand dairy products are exported.

On the technical side, the Kiwi is making a consolidation structure; we expect if it breaks down, the target level is the confluence between Daily S2 and Weekly S1, the zone from the Kiwi could find buyers again.

NZD-USD 1-hour chart ( click on the image to enlarge)

 

FAANG – AMAZON DESPITE THE BULLISH GAP, CLOSES LOWER  

In the last session, Amazon <AMZN> opens higher by 1.53%, boosted by the project between Amazon and Berkshire Hathaway (the Warren Buffett’s company) to create a healthcare company with “reasonable costs”.

The chart shows us a clear bull trend. Bullish positions must be considered above the confluence between Daily R2 and Weekly R2, which could be working as strong resistance.

Amazon <AMZN> 1-hour chart ( click on the image to enlarge)

 

FAANG – GOOGL AND AAPL CLOSE MIXED BEFORE THE EARNINGS RELEASE.

Google <GOOG> has been the best performer of the session with a 0.88% advance, aided by the expectation before the earnings release, which will be after the closing market; the analyst consensus expects $31.87B of revenues and $9.98 earnings per share (EPS).

We expect that GOOG reaches the weekly R1 level ($1,191.32) during the session, a zone that could find sellers.

Google <GOOG> 1-hour chart ( click on the image to enlarge)

 

Another company that will release earnings, after the market closes, will be Apple <AAPL> which has closed with a -0.17% performance. The analyst expects $77.25B of revenues and $3.85 EPS.

In the AAPL case, it is probable that it will reach the 164.22 level, the zone from where it could find buyers to the weekly pivot point (173.60).

Apple <AAPL> 4-hour chart ( click on the image to enlarge)

 

CRYPTOS – BTC TESTS THE PSYCHOLOGICAL 10,000 SUPPORT.

In the last session and the past week, Bitcoin <BTCUSD> has been testing the psychological level $10,000; we expect that BTC plunges to $8,074 level as a continuation of the bearish cycle started on the 17th December 2017.

BitCoiun <BTC> 4-hour chart ( click on the image to enlarge)

 

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Forex Market Analysis

WEEKLY UPDATE from January 22 to 26, 2018

 

Weekly Update’s Hot Topics:

  • JPY – BOJ KEEPS THE MONETARY POLICY UNCHANGED, AND INFLATION CLOSE TO TARGET.
  • DOLLAR – DESPITE THE DEAL TO STOP THE SHUTDOWN THE GREENBACK HAS CONTINUED FALLING.
  • EUR – EURO EXCEEDS 1.25 HELPED BY DECLARATIONS OF DRAGHI.
  • AUD – EXPECTED VOLATILITY DUE TO INFLATION DATA RELEASE.

 

This week, the best performer was Crude Oil <USOil> with a rise of 4.48%. WTI has reached $66 (US)/Barrel, the highest level since December 2014. Despite the strikes deal between the Republican and Democrat US Senators to stop the Government shutdown, the Dollar <DOLLAR> cannot take a breath and continued falling 1.56% this week.

 

JPY – BOJ KEEPS THE MONETARY POLICY UNCHANGED, AND INFLATION CLOSE TO TARGET.

The Bank of Japan (BoJ) decided to keep the monetary policy and the economic stimulus unchanged. Kuroda (The Bank of Japan governor) has signalled that the BoJ might be nearing the start of policy normalisation: but not so fast. The BoJ’s members voted 8-1 to keep its interest rates and asset purchases at current levels. Also, Kuroda said inflation expectations had stopped falling. The BoJ’s perspective is that the economy will grow 1.4% in the fiscal year starting in April, with an inflation of 1.4% over the same period.

The inflation data (YoY), excluding the food component, released this week has reached 0.9%. Kuroda, speaking at the World Economic Forum in Davos has said that “there are some indicators that wages and some prices have started to rise”. Also added that “there are many factors that make reaching the 2% target difficult and time-consuming, but we are finally close”.

 

Technically, the USD-JPY is completing a sideways consolidation macro-structure. Our vision is, if we expect the price to fall to 108.16 to 107.18, the yen could find buyers again.

USD-JPY  Daily Chart ( click on the image to enlarge)

DOLLAR – DESPITE THE DEAL TO STOP THE SHUTDOWN THE GREENBACK HAS CONTINUED FALLING.

This week the Republicans Senators have struck a deal with the Democrats to temporally stop the US Government shutdown which lasted for three days, the first shutdown since 2013. In this agreement, Democrats have accepted to vote for the bill while they will continue negotiating immigration legislation for “dreamers” (children that migrate illegally to the US). This agreement has as a deadline February 8.

The week has ended with the US GDP (QoQ) data release. The US economic growth is at 2.6%, that is lower than the expected 3% in the fourth quarter. Although the fourth-quarter GDP has been slowed, in 2017 the economic growth has gained momentum from the 0.9% reported in March 2017.

 

Technically, the US Dollar Index has broken down in the past week to the 88.9 level. Our vision for the next week is a limited downward turn to the 87.85 to 87.1 area, and then for it to make a potential reversal pattern to reach 91.03 level.

US Dollar Index Daily Chart ( click on the image to enlarge)

 

EUR – EURO EXCEEDS 1.25 HELPED BY DECLARATIONS OF DRAGHI.

This Thursday the common currency has raised to over 1.25, the highest level since December 2014. In the last Monetary Policy Decision ECB Conference, President Mario Draghi has maintained the accommodative policy and the interest rates will remain well beyond the end of the QE.

Regarding forex risk, Draghi signalled that “now, we have downside risks relating primarily to geopolitical and especially foreign exchange markets. But by and large, the risks to growth are balanced.”

On the technical side, once the Euro reached the weekly Fibonacci level F(38.2), it has started to make a corrective move leading the pair to the 1.24235 level. Our central vision is that the Euro could start a new bearish cycle, where our first target is 1.16845.

 

EUR-USD  Daily Chart ( click on the image to enlarge)

AUD – EXPECTED VOLATILITY DUE TO INFLATION DATA RELEASE.

In the last week of the month in the Oceanic Session, the volatility expected will come from the Inflation (QoQ) data release. The analysts expect that the CPI (QoQ) will be 0.8% and (YoY) 2.0%. Under this context, the RBA (Reserve bank of Australia) could hike the Interest Rate in the next Monetary Policy Meeting scheduled on February 6.

As has been forecasted previously, our primary vision remains bullish for the Aussie, where the long-term target is 0.8433 level from where the price could find sellers to begin to develop a major degree connector.

AUD-USD  Daily Chart ( click on the image to enlarge)

Categories
Forex Market Analysis

Weekly Forecast w/c 22nd January 2018

Weekly forecast’s Hot Topics:

  • DOLLAR – US GOVERNMENT SHUTDOWN STILL WITHOUT A DEAL.
  • EUR – WHAT TONE WOULD DRAGHI TAKE IN THE NEXT ECB MONETARY POLICY DECISION?
  • GBP – COULD IT BE MAKING A TERMINAL PATTERN?

Weekly Performance

The past week, the best performer was the Aussie with an advance of 1.18% supported mainly by the stronger employment change data released on Thursday 18th, where it was forecasted 9K and the change reported was 34.7K. The worst performer was the Loonie which fell -0.33% after the BoC decision that kept the interest rate at a 1.25%.

 

DOLLAR – US GOVERNMENT SHUTDOWN STILL WITHOUT A DEAL.

This week the US agenda will be driven by the Government shutdown and the deal expectation that the Republican Senate could achieve with Democrats. On the economic side, the main macroeconomic events will be from the housing market, in both Existing Home Sales and New Home Sales, a moderated decrease is expected.

Technically, the US Dollar Index is in a range between 89.99 and 90.8. RSI is showing bullish divergence signals. The price could make a new low to the 89.6 area before it starts a new bullish cycle.

EUR – WHAT TONE WOULD DRAGHI TAKE IN THE NEXT ECB MONETARY POLICY DECISION?

This Thursday 25th, the market volatility will be led by the Mario Draghi tone in the ECB Monetary Policy Decision Conference. Investors are expecting answers to the following questions: When will the first interest rate hike be? When will the QE end? What is his opinion about the strength of the Euro and the inflation level due to the climb in oil prices? Also, the market is expecting news about his successor in the ECB Presidency.

On the technical side, in the short term, the price remains bullish. Our vision is a limited appreciation of the common currency to 1.239 area for then start a new bearish cycle that could reach the 1.15 area.

 

GBP – COULD IT BE MAKING A TERMINAL PATTERN?

The Sterling has a gaining momentum as it approaches 1.40 level. In this area, we find the 2nd weekly resistance level (1.406); our vision is that in this area the pound could find resistance and start a corrective structure in the first instance to 1.384, and the second instance to 1.373 level.

Categories
Forex Market Analysis

Daily Abstract 22nd January 2018

Daily Abstract’s Hot Topics:

  • USD – THE US GOVERNMENT SHUTDOWN ENDS AS SENATE MAKES A DEAL.
  • EUR – PRESIDENT MACRON TO BBC: FREXIT IS COMING?
  • JPY – ANALYSTS DON’T EXPECT CHANGES IN THE MONETARY POLICY.

 

Main currencies daily performance.

USD – THE US GOVERNMENT SHUTDOWN ENDS AS SENATE MAKES A DEAL.

The US government shutdown ends after the Senate Republicans and Democrats voted to approve a temporary funding bill. Democrats have accepted to vote for the bill while they will continue negotiating immigration legislation for “dreamers.” The agreement has until the 8th February deadline.

 

The Buck today has moved in a range expecting an agreement between Republicans and Democrats. The bias remains bearish.

EUR – PRESIDENT MACRON TO BBC: FREXIT IS COMING?

The French President Emmanuel Macron said to BBC that he would have “probably” voted to leave the EU if offered the choice in a referendum. This is not the first time that President Macron has spoken about the Frexit idea, on the 1st of May 2017, in the presidential campaign, he said that “we have to reform this Europe” or “we will have a Frexit.”

Despite the President Macron’s declarations, the Euro is still moving in a range between 1.221 and 1.227; probably the common currency is expecting for more volatility that could be helped by the German ZEW Economic Sentiment data release.

 

JPY – ANALYSTS DON’T EXPECT CHANGES IN THE MONETARY POLICY.

The BoJ (Bank of Japan) will release its statement on today’s Monetary Policy Meeting. The analysts do not expect changes on monetary easing despite recent signs of economic recovery, and the inflation target is below the BoJ target (0.6% real vs 2% target). Probably the Governor Haruhiko Kuroda could give signs of the reduction in the quantitative easing and the interest rate hike in the long-term.

 

Technically, the pair USDJPY is in a sideways structure. Our vision is that there will be a probability of a bearish continuation before a spike to 111 level for starting a downward cycle.