Tag: Fundamental Analysis

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Forex Videos

Forex Fundamental & Economic Indicators Part 2 – How Institutional Traders Read Into News

https://youtu.be/hnNdfQFM_vs

https://youtu.be/hnNdfQFM_vs

Fundamental Analysis – Economic Indicators – Part 2

Professional traders plan ahead, and so should you too. Whether you are an institutional trader with a long-term view you or an intraday retail Forex trader looking to scalp a few pics here and there. It is absolutely necessary that you plan in advance by looking at your economic calendar in order that you do not inadvertently trade at times of potential increased volatility.

Example A


In example A, on Monday 13th January 2020, we can see from our economic calendar that there is a slew of data pertaining to the British economy, which due to be released into the market at 9:30 a.m. GMT. The data is considered to be low to medium in importance and covers things such as total business investment year on year, the trade balance and industrial production month on month, which is of medium important and gross domestic product, month on month, which is also of medium importance.

Example B


In example B, which is a 1-hour chart of the GBPUSD pair, we can see that there has been a sell-off in the pair in the run-up to these figures being released. This is somewhat due to the fact that in the last few days, the Bank of England has been quite dovish regarding future growth for the British economy this year, plus strong hints that they may reduce interest rates by a half a point by the end of the year. Therefore traders are on the back foot while expecting that the British economy will continue to slow down and they will be sensitive to any data releases that point too to a weakening in the economy, which will provide further ammunition for policymakers in the Bank of England to reduce interest rates in the United Kingdom.

Example C


In example C, of our economic calendar, just a moment after the data has been released, we can see that the figures across the board are largely worse than expected, with the most important figure; which is the gross domestic product – month-on-month – showing a worse than expected decline of – 0.3%.

Example D


In example D, we have returned to our 1-hour chart of the GBPUSD, and we can see that there was a further spike lower in the pair post announcement of the economic data release.
However, we often find in the forex market, that institutional traders will have anticipated that the market data may have been worse than expected. And in some circumstances, even though the economic data release is bad for the economy, it might be perceived by traders as not being as bad as expected.
If we stick with this example for one moment, we can see that the overall trend has been to the downside with this pair. Therefore, new traders should be on their guard, because the pair may have bottomed out, even though there was bad data, and set for a reversal in price action. And this is one of the dangers when it comes to trading around economic data releases.

Example E


In example E, we return just 4 hours later to our hourly chart of the GBPUSD pair, and we can see that indeed price action had bottomed out because traders had anticipated that all the bad news was already in the price, and they decided to buy the pair.

In part 3, we will be looking at different types of economic indicators and their importance to the financial markets.

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Forex Market Analysis

Daily F.X. Analysis, January 23 – Top Trade Setups In Forex – ECB Interest Rate In Highlights! 

The European Central Bank will deliver its interest rates decision (deposit facility rate expected to be unchanged at -0.50%). The European Commission will release the eurozone’s December Consumer Confidence Index (-7.0 expected).

The European Central Bank will deliver its interest rates decision (deposit facility rate expected to be unchanged at -0.50%). The European Commission will release the eurozone’s December Consumer Confidence Index (-7.0 expected).

The European Central Bank will deliver its interest rates decision (deposit facility rate expected to be unchanged at -0.50%). The European Commission will release the eurozone’s December Consumer Confidence Index (-7.0 expected).

The U.S. Labor Department will post initial jobless claims in the week ended January 18 (215,000 expected). The Conference Board will release its December Leading Index (-0.2% on month expected).

Economic Events to Watch Today

 

EUR/USD – Daily Analysis

The EUR/USD currency pair is moving flat and consolidating in the narrow range between the 1.1070 – 1.1120 ahead of the European Central Bank’s decision regarding rates. As of writing, the EUR/USD currency pair is currently trading at 1.1085. The pair have not attempted any move out of the range 1.1070 – 1.1120 since January 17.  

The European Central Bank is likely to keep interest rates and other essential policy tools unchanged. As we know, the ECB had delivered rate cut by ten basis points to -0.5% in September 2019. Moreover, the Bank also restarted bond purchases in October.

It is worth to mention that the purpose of Thursday’s meeting would be to announce the official strategy review, which would redefine its mission and tools. The Bank would also set the scope and parameters for the review, which could gain the attention of traders.

Moving ahead, the EUR currency will likely put strong bids if the speech of ECB President Lagarde decreases the chances of the possible change in the sense of the price stability and methods to achieve it.

On the other hand, the German economy is flashing green in the wake of optimism surrounding the United States and China trade deal. As we already mentioned that the EUR currency might pick up bid if Lagarde focuses on recent positive data, and confirm the need for more effort toward the economy.

On the negative side, the EUR currency could be subject to selling pressure if the Lagarde ignores the recent German/Eurozone economic recovery and focus more on the downside risks. Furthermore, any sign regarding Bank planning to adopt a higher inflation target in the future will likely push the EUR currency lower.


Daily Support and Resistance           

  • S3 1.1031
  • S2 1.1059
  • S1 1.1076
  • Pivot Point 1.1087
  • R1 1.1105
  • R2 1.1116
  • R3 1.1144

EUR/USD– Trading Tips

On Thursday, the EUR/USD is trading at 1.1086 area, having formed a series of Doji candles pattern above 1.1070 support level, particularly on the 4-hour timeframe. The bullish Doji pattern is proposing the odds of a bullish and bearish trend both in the EUR/USD as it depends upon the ECB rate decision. 

The EUR/USD can show bullish correction until 1.1106. On the lower side, a breakout of the support level of 1.1077 can lead EUR/USD prices towards the 1.1045 area. 

GBP/USD– Daily Analysis

The GBP/USD currency pair was flashing red, and it failed to continue its three-day bullish rally despite the United Kingdom’s Prime Minister Boris Johnson’s Brexit deal victory regarding Withdrawal Agreement Bill (WAB). As of writing, the GBP/USD currency pair is currently trading at 1.3015 and is consolidating in the range between the 1.3119 – 1.3152.

On the front of the leading news, despite seeing 5-amendments from the House of Lords, the Tory leader/UK PM Boris Johnson has passed his WAB Bill through the Parliament (without modification) in the wake of majority support. As of now, the bill will get the royal approval within 9-days to become law.

Whereas, the hard Brexit fears continue to surround the market. That is due to the European Union chief Von der Leyen saying that the United Kingdoms’ position would be weakened in the single market if it does not continue to sign up the European Union rules and regulations after Brexit withdrawal. The E.U. chief also said that the trade talks would start from February, after considering that there could be a further delay until March.

Moreover, the pair could weaken further in the wake of the U.S. threat to impose the sanctions if the United Kingdom moves forward in its punitive measures to impose digital service tax on search engines like Google and Facebook. Whereas France backed out after the warning from Washington and agreed with the U.S. to develop an international framework for digital taxation at the OECD level, but both disagree on ways to shape it.

At the China front, fears of a Chinese virus explosion and noises surrounding the US-China trade deal, as well as the U.S. President Donald Trump’s impeachment hearings, all are keeping the market under pressure.

As a result, the U.S. ten-year treasury yields remained under pressure around 1.75%, while the Asian stocks also gave mixed trade sentiment.

Daily Support and Resistance

  • S3 1.2879
  • S2 1.2994
  • S1 1.3067
  • Pivot Point 1.311
  • R1 1.3182
  • R2 1.3225
  • R3 1.3341

GBP/USD– Trading Tip

On the 4 hour timeframe, the GBP/USD is testing the resistance level, which is extended by the bearish channel at 1.3060. At the moment, the GBP/USD pair is trading at 1.3060, and it seems to extend its bullish bias until 1.3090.

The GBP/USD pair may find support around the 1.3044 area today. Whereas, the RSI and MACD support the bullish bias. Let’s look for selling trades below 1.3080 and bullish trades above 1.3010. 

USD/JPY – Daily Analysis

The USD/JPY currency pair failed to cross the 110.00 range and is still trading on the bearish track below the 110.00 level, mainly due to the risk-off market sentiment in the wake of global coronavirus spread. As of writing, the USD/JPY currency pair is currently trading at 109.55 and is consolidating in the range between the 109.50 – 109.86.

As we already mentioned, the USD/JPY currency pair failed to break the 110 handles because of the lack of events to distract the market attention from the virus fears as well as Trump’s impeachment trial. Whereas the U.S. stock markets had mixed sentiment and without the full commitment from U.S. dollar traders, the prices finally dropped.

The virus has killed 17 people so far in China, and leaders have almost closed Wuhan and also keeping the focus on the other nation to understand the cause behind the virus. By the way, the virus is known to be humanly transmitted. As a result, market risk-tone has severely disturbed.

At the Sino-US trade font, the U.S. has decided to reduce some part of its tariffs on Chinese products on this Valentines’ Day, as agreed in the phase-one deal, which resulted in ease in the uncertainty about the impact of the US-China deal on global financial markets.

Although the trade and geopolitical fears have been pushing the markets off lately, the rising trade optimism has given a cool tone to the market. Despite that, the U.S. ten-year treasury yields remained weak, around 1.77%, whereas global equities have also shown mixed results.

Looking forward, the Investors will keep their eyes on Japan’s trade figures, All Industry Activity Index, and Leading Economic Index, as well as the news headlines, to further invest in the market. On the negative side, a possible recovery in Japanese Yen will likely keep the pair under pressure. And on the positive side, the BOJ Governor’s overall dovish outlook in the latest meeting, as well as the broad greenback strength, could keep the pair bullish.

Daily Support and Resistance

  • S3 109.4
  • S2 109.65
  • S1 109.74
  • Pivot Point 109.9
  • R1 109.99
  • R2 110.15
  • R3 110.41

USD/JPY – Trading Tips

The USD/JPY pair has finally violated the double bottom level of 109.850, which is now leading the currency pair towards the next support level of 109.185. Technically, the USD/JPY may find resistance around 109.850, which is the same level that provided support to the USD/JPY earlier. We can see selling below this level until 109.250. Moreover, the RSI and MACD have crossed over in the selling zone. Today, I will be looking for selling trades below 109.850 and selling above 109.250 level. 

All the best for today! 

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Crypto Market Analysis

Daily Crypto Review, Jan 23 – SEC hunting ICOs, Cryptos having a red day

The crypto market seems to have stopped consolidating and started moving slightly downwards. Prices started moving down slightly, so the real downtrend is still early to call. Bitcoin’s price went down 1.76% on the day. It is currently trading for $8,567. Meanwhile, Ethereum lost 2% on the day, while XRP went down 2.31%.

The crypto market seems to have stopped consolidating and started moving slightly downwards. Prices started moving down slightly, so the real downtrend is still early to call. Bitcoin’s price went down 1.76% on the day. It is currently trading for $8,567. Meanwhile, Ethereum lost 2% on the day, while XRP went down 2.31%.

The crypto market seems to have stopped consolidating and started moving slightly downwards. Prices started moving down slightly, so the real downtrend is still early to call. Bitcoin’s price went down 1.76% on the day. It is currently trading for $8,567. Meanwhile, Ethereum lost 2% on the day, while XRP went down 2.31%.

SWIPE gained 18.95% on the day, making it the most prominent daily gainer. On the other side, Centrality lost 9.52% on the day, making it the biggest daily loser for the third time in a row.

Bitcoin’s dominance went up a quarter of a percent in the past 24 hours. It is now at 65.75%, which represents an increase of 0.25% when compared to the value it had yesterday.

The cryptocurrency market capitalization lost a bit of its value in the past 24 hours. It is currently valued at $237.54 billion, which represents a decrease of $2.61 billion when compared to the value it had on yesterday.

What happened in the past 24 hours

It is known that the Securities and Exchange Commission (SEC) is investigating ICOs for any potential fraud. During the investigation, the SEC has charged Sergii Grybniak, the founder of Opporty. The SEC targeted this project for falsely declaring that they are 100% SEC compliant, while they were not. This project managed to raise $600,000 during its ICO.

Opporty project launched its ICO between Sept and OCT 2018. The project was mainly aimed at US investors and claimed to provide a “blockchain-based ecosystem for small businesses and their customers.”

Honorable mention

NEM/XEM

The NEM Foundation managed to reach an agreement with the leading crypto hotel booking platform, Travala. The deal makes the NEM native token, XEM, available for booking. This way, NEM users can book their stay in over 2 million hotels across the world.

The integration of XEM on the platform would certainly open the path for this cryptocurrency, as it will provide a great use-case to it. XRM can now be used to book hotels in over 2 million hotels in 230 countries.

Travala users who want to use XEM for booking a hotel will get about 40% discount rate where Travala offers accommodation booking services.

_______________________________________________________________________

Technical analysis

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Bitcoin

Bitcoin was trading in a very tight range for 48 hours straight. The largest cryptocurrency finally left that range and started moving. Unfortunately, the move was downward-facing. Bitcoin moved away from its $8,650 level and started decreasing in price. Bulls and bears are currently fighting for who is going to take over the next move. Bitcoin’s next support level is somewhere around $8,436, while its resistance is all the way up to $8,815. The $8,650 level was not an important level in the most recent price activities, so it should be disregarded.


Key levels remain the same as there were no support or resistance breakouts.

Key levels to the upside                    Key levels to the downside

1: $8,815                                           1: $8,436

2: $8,905                                           2: $8,130

3: $9,115                                           3: $7,880

Ethereum

Ethereum has once again confirmed that it is the most correlated crypto asset. Its price followed the market downwards, which made the price drop to $165. Ethereum is currently in a really tight range, as its immediate support level is right at $163.5. On the other hand, its nearest resistance level is at $167.8.


Ethereum saw a slight rise in volume in the past few candles as the direction of the next move is unsure, and bulls and bears are fighting. Its RSI value is right below the middle of the value range.

Key levels to the upside                    Key levels to the downside

1: $167.8                                             1: $163.5

2: $178.65                                          2: $160

3: $185                                               3: $154.2

Ripple

XRP lost some value as well today. The price drop solidified XRP’s position below the $0.235 line. Even though this line was not well-respected in the most recent price activity, it is still a valid resistance level. XRP is now trading in the middle of the range, bound by $0.227 to the downside and $0.235 to the upside. If we disregard the $0.235 resistance, the next viable level would be $0.24545.


XRP’s volume is pretty stagnant for the past couple of days, and so was its RSI level.

Key levels to the upside                    Key levels to the downside

1: $0.235                                            1: $0.227

2: $0.24545                                        2: $0.221

3: $0.2553                                          3: $0.211

 

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Forex Market Analysis

Daily F.X. Analysis, January 22 – Top Trade Setups In Forex – Weaker Dollar Sentiment In Play! 

In Asian trading hours, EUR/USD edged up to 1.1098, and GBP/USD climbed to 1.3011. The USD/JPY slid to 109.97. This morning, the Bank of Japan, as widely expected, kept its policy rate at -0.10% and a 10-year yield target at 0% unchanged. The central bank raised its 2020 Japan’s GDP growth forecast to 0.9% from 0.7% previously. Spot gold marked a day-high of $1,568.6 an ounce before easing to $1,566.0 an ounce.

In Asian trading hours, EUR/USD edged up to 1.1098, and GBP/USD climbed to 1.3011. The USD/JPY slid to 109.97. This morning, the Bank of Japan, as widely expected, kept its policy rate at -0.10% and a 10-year yield target at 0% unchanged. The central bank raised its 2020 Japan’s GDP growth forecast to 0.9% from 0.7% previously. Spot gold marked a day-high of $1,568.6 an ounce before easing to $1,566.0 an ounce.

In Asian trading hours, EUR/USD edged up to 1.1098, and GBP/USD climbed to 1.3011. The USD/JPY slid to 109.97. This morning, the Bank of Japan, as widely expected, kept its policy rate at -0.10% and a 10-year yield target at 0% unchanged. The central bank raised its 2020 Japan’s GDP growth forecast to 0.9% from 0.7% previously. Spot gold marked a day-high of $1,568.6 an ounce before easing to $1,566.0 an ounce.

The ZEW Financial Market Survey is an aggregation of the sentiments of almost 350 economists and analysts on the economic future of Germany is scheduled to release today. Germany, which is considered as the Eurozone’s manufacturing powerhouse, suffered a marked slowdown in 2019, in the wake of the Sino-US trade tensions.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD slipped 0.1% to 1.1085. The German ZEW Current Situation Index bounced to -9.5 in January (-13.5 expected) from -19.9 in December.  

The EUR/USD currency pair bullish level above 1.11 was not long-lived. The pair closed the day with 0.11% losses, creating an inverted hammer and confirming a head-and-shoulders breakdown on the daily chart. 

Looking forward, Italy’s Business Climate, Industrial Sales, and Industrial Orders for November are scheduled to release today. However, these data could not influence the market as well as the U.S. housing data is expected to release and will likely leave the impact on the U.S. Dollar.

The ECB is not supposed to appear on Thursday, although Bloomberg announced that 90% of analysts anticipate a change to the inflation strategy. It will be the first move in 17 years if President Lagarde rules to perform the adjustment.

Daily Support and Resistance

  • S3 1.0996
  • S2 1.1051
  • S1 1.107
  • Pivot Point 1.1106
  • R1 1.1125
  • R2 1.1161
  • R3 1.1216

EUR/USD– Trading Tips

On the 4 hour timeframe, the EUR/USD is trading at 1.1086, having formed a Doji and bullish engulfing pattern above 1.1070 support level. The bullish engulfing pattern is proposing the odds of a bullish trend in the EUR/USD. The EUR/USD can show bullish correction until 1.1106. On the lower side, a breakout of the support level of 1.1077 can lead EUR/USD prices towards the 1.1045 area. 

GBP/USD– Daily Analysis

The GBP/USD rebounded 0.3% to 1.3046. Official data showed that the U.K. jobless rate for the three months to November remained steady at 3.8% (as expected), and average weekly earnings grew 3.2% on year (+3.1% estimated).

The U.K. Office for National Statistics will release December public sector net borrowing, excluding banking groups (5.3 billion pounds expected).

In the U.S., the Federal Reserve Bank of Chicago will post the December National Activity Index (0.15 expected). The National Association of Realtors will report December’s existing-home sales (5.43 million units expected). The FHFA will release November House Price Index (+0.3% on month expected).

The pound to dollar is striving to post a third continuous day of profits and is probing a vital resistance zone. GBP/USD set higher on Monday and spread gains yesterday following an upbeat U.K. jobs report.

Daily Support and Resistance

  • S3 1.2812
  • S2 1.2928
  • S1 1.2969
  • Pivot Point 1.3044
  • R1 1.3085
  • R2 1.316
  • R3 1.3276

GBP/USD– Trading Tip

On Wednesday, GBP/USD continues to trade bullish over a weaker dollar. On the 4 hour timeframe, the GBP/USD is testing the resistance level, which is extended by the bearish channel at 1.3060. At the moment, the GBP/USD pair is trading at 1.3060, and it seems to extend bullish bias until 1.3090.

The GBP/USD pair may find support around the 1.3044 area today. Whereas, the RSI and MACD support the bullish bias. Let’s look for selling trades below 1.3080 and bullish trades above 1.3010. 

USD/JPY – Daily Analysis

The USD/JPY closed at 109.859 after placing a high of 110.220 and a low of 109.760. Overall the movement of the USD/JPY pair remained strongly bearish that day.

On Tuesday, USD/JPY dropped to its one-week lowest after the Bank of Japan revised its growth projections for 2020. The Bank of Japan raised its growth estimates for the fiscal year beginning in April to 0.9%, which it previously estimated as 0.7% in October.

According to reports, the Bank of Japan kept its monetary policy on hold. It raised its forecasts for economic growth in 2020 because of the stimulus package of government and the decreasing pessimism over the global outlook. 

The Bank of Japan signaled the rising optimism over the global outlook after the United States and China agreed on the Phase-one trade deal to resolve their trade conflicts. Bank said that the risks surrounding the global perspective have decreased to some extent, and this has provided the bank with the possibility to increase its forecast for the growth of Japan’s economy in 2020.

Daily Support and Resistance

  • S3 109.73
  • S2 109.94
  • S1 110.04
  • Pivot Point 110.15
  • R1 110.25
  • R2 110.35
  • R3 110.56

USD/JPY – Trading Tips

On Wednesday, the USD/JPY pair continues to exhibit choppy trading sessions due to a lack of fundamentals. The USD/JPY has traded bearishly as it fell from 110.200 to trade at 109.950, but the pair continues to consolidate in a narrow trading range of 109.800 – 110.150.

Technically, the USD/JPY is supported above 109.850, and we can see buying above this level until 110.490. The USD/JPY may find a resistance level of 110.570. Moreover, the RSI and MACD have crossed over in the selling zone. Today, I will be looking for buying trades over 110.15 and selling below at the same level. 

All the best for today! 

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Forex Videos

Forex Fundamental & Economic Indicators Part 1 – How To Understand The Strength Of A Currency

https://youtu.be/i_AO21esRws

https://youtu.be/i_AO21esRws

Fundamental Analysis – Economic Indicators – Part 1

Trading any asset in the financial markets is complicated, and there are simply no shortcuts to becoming a successful trader, it all comes down to education. One of the biggest mistakes that new traders make is to learn about technical analysis without also learning about fundamental analysis, which is just as critical, if not more so. Fundamental analysis is the study of the macroeconomics pertaining to a particular country. It measures its wealth, and in the Forex market, a country’s wealth will determine what its currency exchange rate value is against other countries’ exchange rates.


Fundamental analysis is expressed in the markets by way of economic indicators, which are released by why governments, and non-profit organizations, which monitor economic activity within a country on a regular basis. Economic indicators are in levels of importance attached to each data point where risk rises from low, medium, to high. They can be leading indicators, which tend to precede trends, lagging, which might confirm trends, or coincident, which means the current state of an economy.
Leading indicators include consumer durables and share prices. Coincident indicators include GDP, employment levels, and retail sales. And lagging indicators include the gross national product (GNP), CPI, unemployment rates and interest rates, Once collated, and calculated, the economic information is released and is usually subject to a time embargo, and this typically happens once a month at a set time and day of the week. These are then updated each month, quarter, and each year. Economic indicators are segregated into groups. The higher the rise, the more the likelihood of increased market volatility post-release. More importantly, the release of such data allows traders and investors to understand the current and future economic position of a country and to plan in advance and adjust their portfolios or positions as appropriate.


Once economic indicators are updated, financial policymakers within a country can use the data on how to change policy. Therefore information which may suggest that an economy is overheating, or has as inflation which is below or above government targets, can be critical to policymakers may be forced to make adjustments and therefore perfect a currency exchange rate. Traders will be looking out for such data in order to try and predict if major policy decisions such as interest rate changes could be about to happen in order to adjust their portfolios accordingly. Traders are strongly advised to have access to a reliable economic calendar and refer to it on a regular basis in order to not to get caught out by events such as these. Decent calendars are freely available, and offer a breakdown of economic releases times and will also include things such as expected speeches from political and economic leaders. See example A.
In part 2, we will be looking at how professional traders plan ahead for forthcoming economic data releases.

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Forex Videos

How To Trade Forex In Times Of War – Iran VS America

https://youtu.be/jguKsatyrhM

https://youtu.be/jguKsatyrhM

The brief USA and Iran conflict and how it played out in the market from the 3rd to the 9th of January 2020

It was the conflict that wasn’t. Thank God. So far, anyway. In normal times, the biggest market movers are interest rates. However, when it comes to war and conflicts, and especially where a leading country in the west is involved, nothing moves the markets more. Conflicts cause immense uncertainty in global economics. And that means one thing for investors: they will release cash by liquidating from investments such as stocks and put their money into safe-haven assets such as the Japanese yen or Swiss franc. Although these two currencies return less to the Investor due to their low-interest rates, they are seen as a safe and steady long term investments. Other safe-haven investments at such times are gold and even bitcoin in more recent times.

Indeed during this very short spat between the United States and Iran from the 3rd of January, when President Trump ordered the air-strike, which killed Iranian general Qasem Soleimani to the 7th January 2020. After Iran fired missiles at air bases in Iraq housing US soldiers, we saw a downside move in the major stock indices across the globe, and especially because President Donald Trump had threatened to target 52 sites of interest within Iran, should there be any reprisals. While the world waited with baited breath, extreme market jitters ran throughout the global markets. The US dollar also declined initially.

The oil market was affected during the initial phase because of the vast amount of oil passing through the Middle East region, en route to the rest of the globe, which would have been heavily affected by war in the region, thus sending the price of a barrel of oil to fresh highs. This move adversely affected the Canadian dollar, which moved lower against the USD and other major currencies.

Example A


Example A is of the Dow Jones 30 index, and we can see that the market initially collapsed when Iran fired the missiles to 2 US bases in Iraq, threatening an escalation of the war with the United States and Iran. However, because there was no collateral damage to American forces or their equipment, the Dow Jones quickly erased losses and indeed has subsequently rallied to record highs. This lift has been followed by global indices generally.

Example B

Example B shows a 1-hour chart of the EURUSD pair during the conflict, which, although declined during this period, heavy losses for the euro were pretty much contained in a very narrow sideways range and where the overall trend in the pair was lower prior to the event..

Example C


Example C is the US dollar index, where we can see that, after an initial slide when the Iranian general was killed, and the retaliation by Iran was not effective, and, also, the subsequent de-escalation of the tensions between Iran and the United States, investors have favored the US dollar which is broadly up against the other major currencies. The Yen also retraced its gains, and the USDJPY pair moved higher.
This event goes to show that geopolitics is as important as fundamental analysis when it comes to trading currencies. New traders are strongly advised to learn how all the markets are interwoven and how they react when major events such as wars take place.

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Crypto Market Analysis

Daily Crypto Review, Jan 20 – India at a crypto crossroads; Bitcoin outperforms altcoins

The cryptocurrency market had a red weekend as Bitcoin could not make it through $9,000 to create a clear bull market path for the rest of the cryptos. Bitcoin’s price went down 4.61% on the day. It is currently trading for $8,643. Meanwhile, Ethereum lost 5.93% on the day, while XRP went down 5.95%.

The cryptocurrency market had a red weekend as Bitcoin could not make it through $9,000 to create a clear bull market path for the rest of the cryptos. Bitcoin’s price went down 4.61% on the day. It is currently trading for $8,643. Meanwhile, Ethereum lost 5.93% on the day, while XRP went down 5.95%.

The cryptocurrency market had a red weekend as Bitcoin could not make it through $9,000 to create a clear bull market path for the rest of the cryptos. Bitcoin’s price went down 4.61% on the day. It is currently trading for $8,643. Meanwhile, Ethereum lost 5.93% on the day, while XRP went down 5.95%.

The past 24 did not have any particular prominent gainers. Seele gained 6.78% on the day, making it the biggest daily winner. On the other side, Steem lost 14.74% on the day, which makes it the biggest daily loser.

While every cryptocurrency in the top10 by market cap performed better than Bitcoin during the price rise, each one of them (excluding BSV) fell more than Bitcoin once it was time to go down in price. Bitcoin’s dominance, therefore, increased over the weekend. It is now at 66.31%, which represents an increase of 0.47% when compared to the value it had yesterday.

The cryptocurrency market capitalization decreased over the weekend. It is currently valued at $237.26 billion, which represents a decrease of $8.54 billion when compared to the value it had on Friday.

What happened in the past 24 hours

Following the last August session, the Supreme Court of India reconvened once again this week. The topic was the Crypto v. RBI case. The Supreme Court had asked the Reserve Bank of India to further clarify its position towards crypto and to explain why it enforced a nationwide ban during the last session. It was also on the agenda to discuss if this move was constitutional at all.

In an attempt to defend its stance, the RBI tried to showcase all the security breaches that happened in the crypto industry, therefore presenting itself as an entity that takes care of its peoples’ financial safety.

Honorable mention

Bitcoin SV

Anyone who watched the markets over the past week saw the explosive gains that Bitcoin SV made, as well as the price drop afterward. The cryptocurrency led by Craig Wright, a prominent figure in the crypto industry that claims to be Satoshi Nakamoto, is leading a campaign claiming that Bitcoin SV is the “real deal” because he is the real Satoshi.

He is scheduled to appear before the court on Feb 3 to present the keys to the Tulip Trust that holds over 1.1 million Bitcoin. He supposedly got the rest of the key required from his former business partner Dave Klaiman.

An important thing to note is that most of the volume that brought Bitcoin SV’s surge was actually fake. The majority of the volume came on small exchanges that are easily influenced by one person. There is much evidence pointing to wash trading rather than a genuine interest in this cryptocurrency.

However, Bitcoin SV did manage to be the only cryptocurrency that ended up in the green over the past few day.

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Technical analysis

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Bitcoin

Bitcoin tried to push over $9,000 over the weekend, but failed to do so. Pushing over this barier would, to most people, mean the start of a bull market. However, afterfailing to secure its position above the desired price, Bitcoin tumbled all the way down to $8,460. It has recovered since and is currently trading right above the $8,640 level. The level got tested several times, and might not hold if tested more.


Bitcoin’s volume is on the levels similar to the past week’s levels. Its RSI is in the lower part of the value range.

Key levels to the upside                    Key levels to the downside

1: $8,815                                           1: $8,640

2: $8,905                                           2: $8,436

3: $9,115                                           3: $8,130

Ethereum

Ethereum followed Bitcoin both to the upside and downside. While its gains surpassed Bitcoin’s during the “bull phase,” its losses were larger than Bitcoin’s during the price drop. Ethereum couldn’t break $178.65 and fell back down. It dropped under $167.8 where it is at currently. It is trading in a very tight range between $167.8 to the upside and $163.5 to the downside.


Ethereum’s volume currently on the lower end of the spectrum. Its RSI is near the middle of the value range.

Key levels to the upside                    Key levels to the downside

1: $167.8                                             1: $163.5

2: $178.65                                          2: $160

3: $185                                               3: $154.2

Ripple

XRP performed very similarly to other cryptocurrencies over the weekend. Its price was surging until it hit a wall at $0.24545. The only difference was that XRP actually managed to pass over the resistance a few times before dropping below it once again. It dropped more and more until bulls picked up the pace at $0.226. XRP’s price is now consolidating in a tight range, bound by $0.27 to the downside and $0.234 to the upside.


XRP’s volume is descending and currently on the lower end of the spectrum, while its RSI is in the middle of the value range.

Key levels to the upside                    Key levels to the downside

1: $0.234                                            1: $0.227

2: $0.24545                                        2: $0.221

3: $0.253                                           3: $0.211

 

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Forex Market Analysis

Daily F.X. Analysis, January 20 – Top Trade Setups In Forex – Martin Luther King Day

On the forex front, the U.S. Dollar Index rose 0.3% on the day at 97.61. The euro slid 0.4% to $1.1090. The British Pound dropped 0.5% to $1.3010, snapping a three-day rally. Official data showed that U.K. retail sales unexpectedly fell 0.6% on month in December (+0.6% estimated), fueling expectations of an interest-rate cut by the Bank of England.

On the forex front, the U.S. Dollar Index rose 0.3% on the day at 97.61. The euro slid 0.4% to $1.1090. The British Pound dropped 0.5% to $1.3010, snapping a three-day rally. Official data showed that U.K. retail sales unexpectedly fell 0.6% on month in December (+0.6% estimated), fueling expectations of an interest-rate cut by the Bank of England.

On the forex front, the U.S. Dollar Index rose 0.3% on the day at 97.61. The euro slid 0.4% to $1.1090. The British Pound dropped 0.5% to $1.3010, snapping a three-day rally. Official data showed that U.K. retail sales unexpectedly fell 0.6% on month in December (+0.6% estimated), fueling expectations of an interest-rate cut by the Bank of England.

The U.S. government bond prices declined further after the Treasury Department announced plans to sell 20-year government bonds later this year. The benchmark U.S. 10-year Treasury yield advanced to 1.834% from 1.809% Thursday.

Economic Events to Watch Today

  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.10893 after placing a high of 1.11425 and a low of 1.10862. Overall the movement of the EUR/USD pair remained strongly bearish that day.

On Friday, the EUR/USD pair was dropped near its January low amid the broad U.S. dollar strength after the upbeat macroeconomic data. 

The US-China phase-one trade deal was under whole focus week but failed to impress as it did not include the rolling back of tariffs in it, which was essential for boosting global growth. According to Trump, there would be rolling back of tariffs in Phase-two of a trade deal. The uncertainty from the trade front, as well as Brexit front, continued to weigh on the market.

On Thursday, the closely watched Retail Sales data from the United States exceeded the expectations and supported the U.S. dollar. The stronger U.S. dollar after December Retail Sales removed risk appetite from the market and dragged its rival currency Euro on Friday.

The upbeat data from the United States indicated that the economy was doing well then its significant counterparts and weighed on EUR/USD prices.

On Friday, from the European side, at 12:45 GMT, the French Government Budget Balance was announced for November, which showed a deficit of -113.9B. At 14:02 GMT, the Current Account Balance for the whole bloc was released, which also came in short of expectations as 33.9B against the forecasted 34.3B and weighed on Euro.

At 14:02 GMT, the Italian Trade Balance for November showed a decline of 4.87B against the expected 7.22B and weighed on single currency Euro. At 15:00 GMT, the Final Consumer Price Index (CPI) for the year remained flat at 1.3%. The Final Core Consumer Price Index from Eurozone for the year also remained the same as expected at 1.3%. Weaker than expected Trade Balance from Eurozone weighed on EUR/USD and dragged its prices near its month lowest point.

On the other hand, the U.S. dollar was in strength already due to Retail Sales data from Thursday and got even stronger after the release of Housing Starts on Friday. At 18:30 GMT, the number of Houses that started its construction in December exceeded the expectations of 1.38M and came in as 1.61M and supported the U.S. dollar.

The stronger U.S. dollar dragged further the prices of EUR/USD pair and gave the pair a strong bearish candle at the ending day of the week.

Daily Support and Resistance

  • S3 1.1056
  • S2 1.1101
  • S1 1.1119
  • Pivot Point 1.1146
  • R1 1.1164
  • R2 1.1191
  • R3 1.1236

EUR/USD– Trading Tips

On the 4 hour timeframe, the EUR/USD is trading at 1.1096, having formed a bullish engulfing pattern. The bullish engulfing pattern is suggesting the odds of a bullish trend in the EUR/USD. The EUR/USD can show bullish correction until 1.1106 and 1.1112 before showing further selling.

GBP/USD– Daily Analysis

The GBP/USD pair was closed at 1.30094 after placing a high of 1.31187 and a low of 1.30076. Overall the movement of GBP/USD pair remained bearish that day. On Friday, the British Pound was lower against the U.S. dollar as the Retail Sales data from the U.K. came in short of expectations, and the U.S. dollar gained traction at the end of the week amid robust data.

The member of Bank of England Monetary Policy Committee, Gertjan Vlieghe, who previously was in favor of rate hike said earlier this week that he would vote for a rate cut in the next meeting if the data continuously show signs of weakness.

The chances for a rate cut by Bank of England increased on Friday after the release of Retail Sales from Great Britain. At 14:30 GMT, the Office for National Statistics from the United Kingdom published Retail Sales report for December, which showed that Retail Sales slumped to -0.6% from the expectations of 0.5% and weighed on single currency Pound.

The GBP/USD prices rose in the early trading session on Friday before the release of Retail Sales, which decreased the size of the decline in prices of GBP/USD after the publication of data. The pair GBP/USD fell to 1.30 level on the back of the 5th consecutive monthly decline in Retail Sales. 

It should also be noted that in December, there were general elections in the United Kingdom, which could be a cause for the decline in Retail Sales as the political uncertainty could have weighed on consumer minds for spending on Christmas presents.

The next monetary policy decision by Bank of England will take place on coming Thursday, January 30. Only major data to be released by then from the United Kingdom is Manufacturing & Services PMI, which will also be released next week.

On the other hand, the U.S. dollar remained firm on the back of strong Housing Starts figures. At 18:30 GMT, the number of buildings that started their construction in December came in as 1.61M against the expectations of 1.38M and supported the U.S. dollar.

The member of the Federal Reserve Open Market Committee, Harker, also gave comments in favor of the U.S. economy. He said that the economy was doing well, and data will be monitored to decide the further fate of monetary policy and interest rates.

His comments also supported the upward trend of the U.S. dollar on Friday and added in the fall of GBP/USD prices at the ending day of the week.


Daily Support and Resistance

  • S3 1.2946
  • S2 1.3004
  • S1 1.304
  • Pivot Point 1.3062
  • R1 1.3098
  • R2 1.312
  • R3 1.3178

GBP/USD– Trading Tip

On Monday, the GBP/USD pair continues to trade bearish as it tested and failed to violate the downward channel, which was formed on the 4-hour chart. At the moment, the GBP/USD pair is trading at 1.2078, and it seems to extend bearish bais until 1.2925. 

The GBP/USD pair may find support around 1.2925 area today. Whereas, the RSI and MACD support the bearish bias. Let’s look for selling trades below 1.2980.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 110.161 after placing a high of 110.287 and a low of 110.046. Overall the movement of the USD/JPY pair remained bullish that day.

At 9:30 GMT, the Tertiary Industry Activity for November from Japan exceeded the market expectations and supported the Japanese Yen when it came in as 1.3% against the forecasted 1.0%. 

At 2:00 GMT, the TIC Long-Term Purchases data from the United States for November was released by the U.S. Department of Treasury. The report showed a decline of 22.9B from the expected 34.5B and weighed on the U.S. dollar.

At 18:30, the Building Permits for December from the United States showed a decline to1.42M from the expected 1.47M and weighed on the U.S. dollar. However, the Housing Starts in December were increased to 1.61M from the expected 1.38M and supported the U.S. dollar.

At 19:15 GMT, the Capacity Utilization Rate from the U.S. remained flat at 77.0%. But the Industrial Production for December dropped and came in negative as -0.3% from forecasted 0.0% and weighed on the U.S. dollar.

At 20:00 GMT, the Prelim Consumer Sentiment from the University of Michigan came as 99.1, almost in line with the expectations of 99.3, and gave null effect to the U.S. dollar. However, the release of JOLTS Job Openings weighed on the U.S. dollar when it dropped to 6.80M against the expectations of 7.24M for November.

The Prelim Inflation Expectations from the University of Michigan increased in January to 2.5% from December’s 2.3%. The increased Housing Starts and Increased expectations of rising Inflation gave a boost to the U.S. dollar on Friday. The U.S. dollar was further supported by the comments of Patrick Harker, the President of Philadelphia Federal Reserve Bank.

Daily Support and Resistance

  • S3 109.57
  • S2 109.83
  • S1 110
  • Pivot Point 110.1
  • R1 110.27
  • R2 110.36
  • R3 110.62

USD/JPY – Trading Tips

On Monday, the USD/JPY pair is trading with a bullish bias at 110.200 after consolidating in a narrow trading range of 109.800 – 110.150. Recently, the USD/JPY pair has formed Three While Soldiers pattern on the 4-hour timeframe, which typically suggests a bullish trend in the market. 

The USD/JPY is now supported above 110.100, and we may see further buying above this level until 110.490 today. The USD/JPY may find a resistance level of 110.570. Moreover, the RSI and MACD are still staying in the buying zone. Today, I will be looking for buying trades over 110.1 levels with a target of 110.570. 

All the best for today! 

Categories
Forex Market Analysis

Daily F.X. Analysis, January 17 – Top Trade Setups In Forex – UoM Consumer Sentiment Ahead! 

On Friday, China’s industrial production rose by 6.9% in December, against the forecast figures of 5.9% by a significant margin to register the fastest rate of growth since March. Moreover, Retail Sales increased by 8%, beating forecasts of 7.9% growth, but remained unchanged from November. 

On Friday, China’s industrial production rose by 6.9% in December, against the forecast figures of 5.9% by a significant margin to register the fastest rate of growth since March. Moreover, Retail Sales increased by 8%, beating forecasts of 7.9% growth, but remained unchanged from November. 

On Friday, China’s industrial production rose by 6.9% in December, against the forecast figures of 5.9% by a significant margin to register the fastest rate of growth since March. Moreover, Retail Sales increased by 8%, beating forecasts of 7.9% growth, but remained unchanged from November. 

Whereas, the 4th-quarter GDP came in at 6% as expected, while China reported the full-year growth at 6.1%, the slowest in 29 years. Let’s take a look at the trade setups worth trading today. 

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD is facing selling pressure and dropped to 1.1131 from the high of 1.1173 despite the better-than-expected China data. As of writing, the EUR/USD currency pair is currently trading at 1.1134 and consolidates in the range between the 1.1131 – 1.1143. The greenback is seen strong in the wake of better-than-expected U.S. Retail Sales Data, and this is the main reason behind the EUR/USD pair declines.

At the USD front, the greenback picked up the bids across the board. The DXY rose for the day, above 97.30, recovering from weekly lows. The U.S. yield is up as well, with the ten-year at 1.81%, offering support to the greenback.

The EUR currency pair hit the peak of 1.1160 yesterday, confirming an upside break of the descending channel from December 31 and January 6 highs.

At the China data front, the Industrial production rose by 6.9% in December, against the forecast figures of 5.9% by a significant margin to register the fastest rate of growth since March. Moreover, Retail Sales increased by 8%, beating forecasts of 7.9% growth, but remained unchanged from November. 

Whereas, the 4th-quarter GDP came in at 6% as expected, while China reported the full-year growth at 6.1%, the slowest in 29 years. 

It is worth to mention that the markets priced in China recession during 2019, and the economy have been struggling to shift in the recovery mode since the last few weeks in the wake of Sino-US trade truce. Moreover, the Industrial production data shows that the economy will likely regain some stability.

Looking forward, the EUR currency may take further steady declines if the Untied States Industrial Production ignore past expectation; by the way, the data is scheduled to release at 14:15 GMT. As well as, the Eurozone current account surplus and the final consumer price index figures for December are also scheduled to release in Europe.

Daily Support and Resistance

  • S3 1.1056
  • S2 1.1101
  • S1 1.1119
  • Pivot Point 1.1146
  • R1 1.1164
  • R2 1.1191
  • R3 1.1236

EUR/USD– Trading Tips

The bullish setup of EUR/USD shifted dramatically into bearish setup on the release of U.S. Fundamentals. The retail sales and Philly Fed Manufacturing index surprised the market big times, beating the economist’s forecast. The EUR/USD drop from 1.1170 to 1.1130. 

Today, we don’t have any high impact economy which could rive such kind of movement again. Therefore the EUR/USD pair may continue treading in a bearish tone below 1.1145 resistance level. The immediate support can be found around the 1.1125 area. Below this, the next support can be found around 1.1100.

GBP/USD– Daily Analysis

The GBP/USD currency pair stopped its three-day recovery streak and dropped to 1.3065 from the above 1.3100 level, mainly due to broad-based greenback weakness and the European Union sturdy stand on the Brexit. The GBP/USD currency pair is trading at 1.3074 and consolidates in the range between the 1.3065 – 1.3080. The market traders await for the U.K.’s December month Retail Sales for the fresh move.

At the Brexit front, the European Union Trade Commissioner Phil Hogan was the newest man to join the regional diplomat’s voices who shook the Boris Johnson’s Brexit optimism. Moreover, the German minister struck a friendly tone while saying that the U.K. must get post-Brexit defense privileges.

At the USD front, the greenback got support from the upbeat data and over the news of Trump administration’s ability to strike the key trade deals with China, Mexico, and Canada.

Risk-sentiment is still inactive in the market despite China’s positive Industrial production data, and Retail Sales that crossed the forecast figures. The U.S. ten-year treasury yields rose by 1-basis-points to 1.82%. 

Looking forward, the U.K.’s December Retail Sales will be key to watch after the latest disappointment from inflation data, which increased the probabilities of the BOE’s rate cut. Economists are expecting an increase of 2.6% against 1.0% in the YoY figure, whereas the monthly growth might have reversed -0.6% prior growth to 0.7%. As a result, the U.S. housing figures, consumer sentiment, and industrial production will be closely observed for fresh direction.

Daily Support and Resistance

  • S3 1.2946
  • S2 1.3004
  • S1 1.304
  • Pivot Point 1.3062
  • R1 1.3098
  • R2 1.312
  • R3 1.3178

GBP/USD– Trading Tip

On Friday, the GBP/USD pair continues to trade bullish as it has already violated the downward channel, which was formed on the 4-hour chart. At the moment, the GBP/USD pair is trading at 1.3077, and it seems to extend bullish rally until 1.3165. However, this heavily depends upon the British Retail Sales data, which is due later in the day. 

The GBP/USD pair may find support around 1.3030 area today, but the RSI and MACD support the bullish bias. Let’s look for buying trades above 1.3060.  

USD/JPY – Daily Analysis

The USD/JPY currency pair rose mainly due to the strong greenback, and upbeat Industrial data which came out from China. The USD/JPY hit the high level above 110.00 and recently crossed the Tuesday high level of 110.20. The USD/JPY currency pair is trading at 110.25, representing 0.10% gains on the day. The bullish U.S. stocks markets and the positive U.S. data boosted the pair.

At the USD front, the greenback was trading slightly bearish in previous sessions. Still, currently, but currently, the currency has shifted into the bullish territory, mainly due to the release of U.S. economic data. The U.S. dollar index erased losses and climbed to 97.35, rebounding from weekly lows. Moreover, the US Jan Philly Fed index at 17.0 also helped a bid in the U.S. dollar, beating expectations (est. 3.7, prior 2.4) to retest mid-2019 highs.

On the other hand, another positive factor behind the risk sentiment recovery is the U.S. Senate approved the USCMA trade agreement, which now awaits Canada to agree on it and for Trump’s imminent signing.

Daily Support and Resistance

  • S3 109.57
  • S2 109.83
  • S1 110
  • Pivot Point 110.1
  • R1 110.27
  • R2 110.36
  • R3 110.62

USD/JPY – Trading Tips

On Friday, the USD/JPY pair is trading with a bullish bias at 110.200 after consolidating in a narrow trading range of 109.800 – 110.150. Recently, the USD/JPY pair has formed Three While Soldiers pattern on the 4-hour timeframe, which typically suggests a bullish trend in the market. 

The USD/JPY is now supported above 110.100, and we may see further buying above this level until 110.490 today. The USD/JPY may find a resistance level of 110.570. Moreover, the RSI and MACD are still staying in the buying zone. Today, I will be looking for buying trades over 110.1 level with a target of 110.570. 

All the best for today! 

Categories
Forex Market Analysis

Daily F.X. Analysis, January 16 – Top Trade Setups In Forex – Retail Sales In Highlights! 

On Thursday, the investors are watching strictly political events in the U.S. and Russia. The Democratic-led U.S. House of Representatives proposed on Wednesday to send impeachment charges against President Donald Trump to the Senate. Russian Prime Minister Dmitry Medvedev published the compliance of his government after President Vladimir Putin proposed some constitutional changes.

On Thursday, the investors are watching strictly political events in the U.S. and Russia. The Democratic-led U.S. House of Representatives proposed on Wednesday to send impeachment charges against President Donald Trump to the Senate. Russian Prime Minister Dmitry Medvedev published the compliance of his government after President Vladimir Putin proposed some constitutional changes.

On Thursday, the investors are watching strictly political events in the U.S. and Russia. The Democratic-led U.S. House of Representatives proposed on Wednesday to send impeachment charges against President Donald Trump to the Senate. Russian Prime Minister Dmitry Medvedev published the compliance of his government after President Vladimir Putin proposed some constitutional changes.

The U.S. official data showed that the Producer Price Index (PPI) increased 0.1% on month in December, less than +0.2% expected. The Empire Manufacturing Index posted at 4.8 in December, better than 3.6 expected.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD prices closed at 1.11495 after placing a high of 1.11633 and a low of 1.11185. Overall the movement of EUR/USD remained bullish that day.

The EUR/USD pair climbed above 1.1162 level on Wednesday and posted a fresh weekly high. The general weakness of the U.S. dollar supported the move amid increased uncertainty after the release of details about the phase-one trade deal. 

The U.S. & China signed phase-one of the trade deal on Wednesday in which some tariffs on Chinese goods were retained, and this disappointed the traders. Hence, the U.S. dollar lost its demand, and the U.S. Dollar Index moved to weekly lows of 97.20.

The U.S. yields also fell and remained in negative territory on Wednesday and helped EUR/USD to move further in an upward direction. As for the data is concerned, the U.S. macroeconomic data came in mix, and the Producer Price Index (PPI) declined to 0.1% against the expected 0.2% weaker than expected PPI from the U.S. also helped EUR/USD prices to post weekly gains and rise above 1.116 level on Wednesday.

From the Europe side, at 12:45 GMT, the French Final Consumer Price Index (CPI) for December came in line with the expectations of 0.4%. AT 15:00 GMT, Industrial Production from the Eurozone in November showed a decline to 0.2% from expected 0.3% and weighed on single currency Euro.

The Trade Balance from the European Union whole bloc for November showed a deficit of 19.2B against the expectations of 22.3Band added in the pressure of single currency Euro. Though the economic data from Eurozone was against the Euro, it failed to drag the EUR/USD prices on Wednesday because of broad U.S. dollar weakness.

Daily Support and Resistance

  • S3 1.1045
  • S2 1.1086
  • S1 1.1107
  • Pivot Point 1.1126
  • R1 1.1147
  • R2 1.1166
  • R3 1.1206

EUR/USD– Trading Tips

The EUR/USD pair continues to form a higher-high pattern on the 4-hour timeframe, which signifies bullish bias among traders. The pair has recently violated the resistance level of 1.1140, and now it is testing the double top level of 1.1160. It has become the current trading range of EUR/USD for now as the pair is being traded within a limited range. It looks like the market is calm as traders await the ECB Monetary Policy Meeting Accounts and ECB President Lagarde’s speech. We may see EUR/USD trading bullish above 1.114. On the higher side, the violation of 1.1160 can extend buying until 1.1188 today.

GBP/USD– Daily Analysis

The GBP/USD pair closed at 1.30373 after placing a high of 1.30423 and a low of 1.29848. Overall the movement of GBP/USD pair remained bullish throughout that day.

The policymakers of Bank of England have pledged to vote in favor of rate cut and turned the stance of BoE dovish, which weighed on Pound. However, despite the weakness of Pound, the GBP/USD pair managed to post gains on Wednesday amid the U.S. dollar’s weakness.

The US-China trade deal finally got signed on Wednesday but failed to impress traders when the details revealed that most tariffs would remain in place. It weighed on the U.S. dollar and gave a boost to GBP/USD prices.

On the other hand, at 14:30 GMT, the Annual Consumer Price Index (CPI) in the month of December from the United Kingdom was declined to 1.3%from the expectations of 1.5% and weighed on British Pound. The Producer Price Index (PPI) Input in December from the United Kingdom also dropped to 0.1% against the forecasted 0.2%.

The Core Consumer Price Index (CPI) for the year came in short of expectations and added in the pressure of Pound. It came as 1.4% against 1.7% forecasted. 

However, the House Price Index for the year from Britain increased to 2.2% from forecasted1.1% and supported Britain Pound. The PPI Output for December came in line with the expectations of 0.0%. 

The Retail Price Index (RPI) for December also dropped to 2.2% from expected 2.3% and weighed on British Pound.

Most data from Great Britain on Wednesday came against the expectations and weighed on Pound. This confirmed that policymakers would surely vote for a rate cut in the next meeting of Bank of England. GBP/USD was weighed a little after the release of economic data from the U.K. near the level of 1.298 but failed to post losses for the day.

The broad U.S. Dollar weakness gifted the gains posted by GBP/USD on Wednesday amid weaker than expected PPI data along with disappointed details from the US-China phase-one deal.

Daily Support and Resistance

  • S3 1.2845
  • S2 1.2924
  • S1 1.2972
  • Pivot Point 1.3002
  • R1 1.3051
  • R2 1.3081
  • R3 1.316

GBP/USD– Trading Tip

On Thursday, the GBP/USD is taking a bullish turn since the release of negative economic data from the United States. The GBP/USD has violated the strong resistance level of 1.3028, which was extended by the downward channel, and it seems to close candle outside this range. Continuation of bullish trends can lead to GBP/USD prices towards 1.3100 and 1.3156 soon. 

USD/JPY – Daily Analysis

The USD/JPY closed at 109.892 after placing a high of 110.008 and a low of 109.788. Overall the movement of USD/JPY remained bearish throughout the day.

USD/JPY on Wednesday posted losses on the back of the broad weakness of the U.S. dollar amid the release of details of the Phase-one trade deal between the U.S. & China.

U.S. & China finally reached a deal on Wednesday and signed on it to reduce the global trade tensions. Also, the details of the US-China trade agreement were revealed on Wednesday, which is comprised of 86 pages.

Many aspects were included in the phase-one deal like China would increase its U.S. farm purchases in 2020-2021 by $200B from its 2017 purchases. China would provide better protection for intellectual property to U.S. China pledged not to force technology transfer in exchange for entering the Chinese market. 

Both countries agreed on providing a series of measures to open the financial services sector. Both countries agreed not to devalue their currencies to benefit their exports. However, the deal also mentioned that the U.S. would retain 25% tariffs on $250B worth of Chinese industrial goods, which were used by U.S. manufacturers. The tariffs were kept as a threat to China to fulfill its part of the deal.

However, traders got disappointed as tariffs were not removed, and uncertainty emerged in the market, which put pressure on USD/JPY prices.



Daily Support and Resistance

  • S3 109.17
  • S2 109.51
  • S1 109.73
  • Pivot Point 109.84
  • R1 110.06
  • R2 110.17
  • R3 110.5

USD/JPY – Trading Tips

On Thursday, the USD/JPY pair is trading with a bullish bias at 110.017 after breaking above 109.600 triple top resistance level. Closing of Doji pattern followed by strong bullish candle seems to drive bearish bias for the pair, but it’s been trading with a bullish bias over faded demand for haven assets.

The USD/JPY may find a resistance level of 110.570. Moreover, the RSI and MACD are still staying in the buying zone. Today, I will be looking for buying trades over 109.84 level with a target of 110.570. 

All the best for today! 

Categories
Forex Market Analysis

Daily F.X. Analysis, January 15 – Top Trade Setups In Forex – Eyes on PPI Figures! 

On the forex front, the U.S. Dollar Index was little changed at 97.39 on Tuesday. Media reported that the remaining U.S. tariffs on Chinese goods imports are likely to stay in place until after the American presidential election. The Chinese yuan eased against the greenback, as USD/CNH edged up 0.1% to 6.8895, snapping a five-day decline.

On the forex front, the U.S. Dollar Index was little changed at 97.39 on Tuesday. Media reported that the remaining U.S. tariffs on Chinese goods imports are likely to stay in place until after the American presidential election. The Chinese yuan eased against the greenback, as USD/CNH edged up 0.1% to 6.8895, snapping a five-day decline.

On the forex front, the U.S. Dollar Index was little changed at 97.39 on Tuesday. Media reported that the remaining U.S. tariffs on Chinese goods imports are likely to stay in place until after the American presidential election. The Chinese yuan eased against the greenback, as USD/CNH edged up 0.1% to 6.8895, snapping a five-day decline.

The U.S. Labor Department will release December PPI (+1.3% on-year expected). The New York Federal Reserve will publish January Empire Manufacturing Index (3.6 expected). Also, The Federal Reserve will post its economic report, the Beige Book.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair stopped its recovery rally and stuck in the bearish range mainly due to uncertainty surrounding the European Union and United States trade war. As of writing, the EUR/USD currency pair is currently trading at 1.1132 and consolidating in the narrow range between the 1.1125 – 1.1133. As we know, the currency pair hit a high level of 1.1135 during the U.S. trading hours and took a bid at a low near 1.11.

Moving ahead, the European Union’s (E.U.) new trade chief, Phil Hogan, is scheduled to meet the United States Trade Representative Robert Lighthizer and other American officials during Jan. 14-16.

During his visit, Phil Hogan will try to stop the on-going conflict regarding France’s new digital services tax, European support for Boeing’s chief rival, Airbus, and other differences. Whereas some experts said that it might not prove to be peaceful for the Phil Hogan because administration and congress both are frustrated mainly due to European Unions’ unwillingness to negotiate with the United States about agriculture.

Meanwhile, the Houk Lee-Makiyama, director of the European Centre of International Political Economy in Brussels, said that traders would keep their eyes on EU-US matter until any underlying progress is made in resolving US-EU policy differences regarding trade. 

Looking forward, the EUR currency may not get significant gains during this week in the wake of EU-US uncertainty. However, the currency may get some support if the Eurozone Industrial Production data beats past expectations; by the way, the data is scheduled to release at 10:00 GMT.

At the Sino-US front, the United States decided that it will not remove tariffs on Chinese imports until the 2020 presidential elections complete. As a result, the uncertainty grew in the market concerning the signing ceremony of phase one of the trade deal between the U.S. and China, which is scheduled to happen today, while no details of the trade deal have been revealed before the ceremony.

Daily Support and Resistance

  • S3 1.1062
  • S2 1.1097
  • S1 1.1115
  • Pivot Point 1.1131
  • R1 1.115
  • R2 1.1166
  • R3 1.12

EUR/USD– Trading Tips

The EUR/USD has traded slightly higher as investors seem to price in weaker CPI sentiments ahead of the news release. The support becomes a resistance level of 1.1145 is holding the pair below this level. We may have a bullish or bearish breakout upon the release of U.S. CPI data during the U.S. session. 

A bullish breakout of 1.1145 can open further room for buying until 1.1208. Conversely, the closing of bearish candles below 1.1145 can drive the selling trend until 1.1100 support. The next support is likely to be found around 1.1075 today.

GBP/USD– Daily Analysis

The GBP/USD currency pair is flashing green and continuing to trade in bullish sentiment towards 1.3050, mainly due to broad-based U.S. dollar weakness and traders await for the United Kingdom’s CPI report. As of writing, the GBP/USD currency pair is currently trading at 1.3028 and is consolidating in the range between the 1.3014 – 1.3030. 

As for today, the GBP currency has recovered to 1.3034 from the 3-week low of 1.2954. However, market traders are cautious ahead of the United States and China phase-one trade deal’s retail release. As well as, the signing ceremony leaves pressure on the greenback because the United States decided that it will not remove tariffs on Chinese imports until the 2020 presidential election completed. 

Moreover, the GBP currency got little love from the United Kingdom Prime Minister Boris Johnson’s fresh comments about refusing Scottish Prime Minister Sturgeon’s request to hold another Scottish independence referendum, because it gives further support to Hard-Brexit concerns. Besides this, the weak UK GDP data and increased the expectations that BOE’s could continue dovish.

On the other hand, the upbeat U.K. annualized inflation figures will likely strengthen the GBP/USD currency pair’s recovery. However, the greenback’s movement is mainly impacting able for the pair because of the United States and China phase-one trade deal signing ceremony, which is scheduled to happen today at 16:30 GMT.

Looking forward to the calendar, the CPI report is the key data to watch today. As well as, traders will now wait to hear from MPC member Saunders, a former hawk turned dovish, to speak in Northern Ireland today at 08:40GMT. Also, the trader will keep their eyes on the Sino-US phase-one details and signing ceremony.


Daily Support and Resistance

  • S3 1.2845
  • S2 1.292
  • S1 1.2955
  • Pivot Point 1.2996
  • R1 1.303
  • R2 1.3071
  • R3 1.3147

GBP/USD– Trading Tip

On Wednesday, the GBP/USD continues to trade with bearish bias around 1.2980 after violating the 1.3045 support level. On the 4 hour timeframe, the pair has formed a strong bearish candle which is supporting the bearish trend in GBP/USD. The pair is currently trading in a bearish channel, which is extending resistance around 1.3034 along with support around 1.2906. While the MACD is still staying in the selling zone. I will be looking to take sell trades below 1.3000 today to target 1.2925 and 1.2906. 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the low of 109.81 from the high of 110.01, mainly due to the risk-off market sentiment in the wake of uncertainty surrounding the Sino-US phase-one trade deal. As of writing, the USD/JPY currency pair is trading at 109.94 and is consolidating in the range between the 109.81 – 109.94.

Wall Street’s rally came to a sudden stop due to the statement that the United States decided that it will not remove tariffs on Chinese imports until the 2020 presidential elections completed. It raised the uncertainty surrounding the signing ceremony of phase one of the trade deal between the U.S. and China, which will happen today, while no details regarding the deal have been revealed before the ceremony.

Consequently, Asia equity markets have ticked lower after the similar negative bias with the ASX 200 (+0.2%), Nikkei 225 (-0.4%), KOSPI (-0.5%) at the time of writing. 

It should be noted that the market traders are cautious and await for any detail release regarding the Sino-US phase-one trade deal ceremony for taking new directions. Furthermore, the meeting is scheduled to happen today at the White House (reportedly 11:30 am N.Y. time but not confirmed).

Looking forward, the BoJ will maintain QQE with yield curve control for as long as needed to achieve a 2% inflation target. As well as, BoJ will continue to expand the monetary base until consumer inflation exceeds 2%. Moreover, it will not hesitate to take an additional rate cut if risks to achieve the price target grew.

Daily Support and Resistance

  • S3 109.17
  • S2 109.51
  • S1 109.73
  • Pivot Point 109.84
  • R1 110.06
  • R2 110.17
  • R3 110.5

USD/JPY – Trading Tips

On Wednesday, the USD/JPY pair has traded in line with the previous forecast as it continues to trade bullish at 110.017 after breaking above 109.600 triple top resistance level. On the 4-hour timeframe, the candlestick pattern three while soldiers are likely to extend buying trend until the next resistance level of 110.570. Moreover, the RSI and MACD are still staying in the buying zone. Today, I will be looking for buying trades over 109.84 level with a target of 110.570. 

All the best for today! 

Categories
Forex Economic Indicators

Let’s Understand The ‘Current Account’ Economic Indicator

Current Account vs. Capital Account

Current Account vs. Capital Account

Current Account vs. Capital Account

The Current Account and Capital Account make up the two components of the Balance of Payments in international trade. The Capital Account represents the changes in asset value through investments, loans, banking balances, and real property value and is less immediate and more invisible than the current account.

The Current Account

The Current Account is a record of a country’s transactions with the rest of the world. It records the net trade in goods and services, the net earnings on cross-border investments, and the net transfer of payments over a defined period of time. The ratio of the current account balance to the Gross Domestic Product provides the trader with an indication of the country’s level of international competitiveness in world markets.

What makes up the Current Account?

Trade balance: which is the difference between the total value of exports of goods and services and the total value of imports of goods and services.

The net factor income: being the difference between the return on investment generated by citizens abroad and payments made to foreign investors domestically and,

Net cash transfers: where all these elements are measured in the local currency.

What affects the current account balance

The current account of a nation is influenced by numerous factors from its trade policies, exchange rates, international competitiveness, foreign exchange reserves, inflation rate, and other factors. The trade balance, which is the result of exports minus imports, is generally the most significant determining factor of the current account surplus or deficit.

When a country’s current account balance is positive, the country is considered a net lender to the rest of the world, and this is also known as incurring a surplus. When a country’s current account balance is in the negative, known as running a deficit, the country is a net borrower from the rest of the world.

A Current Account Deficit

A Current Account Deficit occurs when a country spends more on what it imports than what it receives on goods and services it exports. This term should not be confused with a trade deficit, which happens when a country’s imports exceed its exports.

When a country is experiencing a strong economic expansion, import volumes may surge as a result. However, if a country’s exports are unable to grow at the same rate, the current account deficit will widen. During a recession, the current account deficit will shrink if the imports decline and exports increase to countries with stronger economies.

Influence on the currency

The currency exchange rate has a huge impact on the trade balance, and as a result, on the current account. A currency that is overvalued leads to imports being cheaper and thus making exports less competitive and widening the current account deficit.  An undervalued currency can boost exports and make imports more expensive, thus increasing the current account surplus.  Countries with a chronic current account deficit will be subjected to investor scrutiny during these periods of heightened uncertainty.  This situation creates volatility in the markets as precious foreign exchange reserves are depleted to support the domestic currency. The forex reserve depletion, in combination with a deteriorating trade balance, puts further pressure on the currency in question. This leads countries to take stringent measures to support the currency, such as raising interest rates and curbing currency outflows.

 

The Data

The Organisation for Economic Co-operation and Development (OECD) was founded in 1961 “[…] to promote policies that will improve the economic and social well-being of people around the world” (Source: OECD) and is comprised of 34 countries. The OECD publishes quarterly reports comparing figures on the balance of payments and international trade of its 34 members.

Here you can get detailed information on the 34 listed countries Current Account Balance https://data.oecd.org/chart/5NMc

 

Categories
Forex Market Analysis

Daily F.X. Analysis, January 13 – Top Trade Setups In Forex – Stronger Dollar In Play! 

On the forex front, the U.S. dollar eased against other major currencies on Friday, as growth in December nonfarm payrolls missed expectations. The Dollar Index slipped 0.1% on the day to 97.36. The euro gained 0.1% to $1.1122.

On the forex front, the U.S. dollar eased against other major currencies on Friday, as growth in December nonfarm payrolls missed expectations. The Dollar Index slipped 0.1% on the day to 97.36. The euro gained 0.1% to $1.1122.

On the forex front, the U.S. dollar eased against other major currencies on Friday, as growth in December nonfarm payrolls missed expectations. The Dollar Index slipped 0.1% on the day to 97.36. The euro gained 0.1% to $1.1122.

The British pound fell 0.1% to $1.3061. Gertjan Vlieghe, a Bank of England policymaker, said in a Financial Times interview that he would vote for an interest-rate cut this month in case no signs of economic improvement show up after the general election. Later today, U.K. monthly GDP and industrial production for November will be reported (both flat on month expected).

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair took an active bid mainly due to the greenback weakness on the back of weak jobs data and wage growth figures, which were released on Friday. As of writing, the EUR/USD currency pair is currently trading at 1.1130 and representing 0.10% gains on the day. The pair is consolidating in the range between the 1.1113 – 1.1131. 

The Nonfarm Payrolls data confirmed the economy added 145K jobs in December and disappointed the forecasted figure of 164K additions by a big margin. 

Especially, the average hourly earnings increased by 2.9% year-on-year in December compared to the 3.1% projection. That was the first under 3% figure since July 2018. The weak wage growth almost renewed disinflation concerns, and as a result, the U.S. ten-year treasury yield dropped by 7-basis points to 1.81% on Friday, which continued to add losses on the day and supported EUR/USD currency pair further.

The EUR currency will be likely to continue its recovery rally because of the United States and China trade optimism. The United States Treasury Secretary Steve Munchin told the markets that there would be negotiations regarding phase-two of the US-China trade deal when the Chinese representatives arrive on January 15.

Looking forward, the German Wholesale Price Index for November is scheduled to release at 07:00 GMT. However, the data rarely leave an impact on the markets. Generally, the EUR/USD pair is at the mercy of the action in the treasury yield for now.

Daily Support and Resistance

  • S3 1.1023
  • S2 1.1068
  • S1 1.1094
  • Pivot Point 1.1112
  • R1 1.1138
  • R2 1.1156
  • R3 1.12

EUR/USD– Trading Tips

The EUR/USD is trading sideways as investors didn’t find any solid reason to determine the trend. The EUR/USD pair is trading at 1.1120, below a strong resistance level of 1.1140. The closing of Doji candle below 1.1140 is supporting the bearish bias. 

On the lower side, the EUR/USD has the opportunity to drop until 1.1070. Below this, the next support stays around 1.1040. The MACD is trying to cross below 0 to support the bearish bias, but there’s still no strong bearish fundamental which can push the pair lower. Consider staying bearish below 1.1125 today.

GBP/USD– Daily Analysis

The GBP/USD currency pair is flashing red and continuing its 4-day losing streak mainly due to dovish tone from the Bank of England, and the European Union-Irish uncertainty surrounding the Brexit. Whereas, the pair is still trading bearish despite the greenback’s weakness. As of writing, the GBP/USD currency pair is currently trading at 1.3026 and consolidates in the range between the 1.3026 – 1.3045.

At the Brexit front, the Irish Deputy Prime Minister Simon indicated uncertainty on the United Kingdom Prime Minister Boris Johnson’s deadline of December 31, 2020, for Brexit, which was also supported by the European Union chief Brexit negotiator and European Council President.

On the other hand, a survey led by the Confederation of British Industries (CBI) and the Price Water Cooper (PwC) showed that the business moral amongst the U.K.’s financial firms jumped for the first time in 4-years.

At the USD front, the greenback’s weakness could be attributed to weak employment figures released on Friday as well as the recent decrease in the U.S. Dollar’s demand. Notably, the rising optimism surrounding the United States & China trade front and decreased chances of the United States & Iran war are the reasons behind the risk-on sentiment in the market. 

Apart from this, the stocks in Asia and the S&P 500 Futures are still flashing green while the U.S. ten-year treasury yields show no signs of movement due to the Japanese holiday. It should also be mentioned that Iran recently arrested the United Kingdom’s ambassador to Tehran, and the global leaders do not like it.

Looking forward, the traders will keep their eyes on the U.K.’s November month Industrial Production, Manufacturing Production, monthly GDP and Trade Balance figures. There, a possible contraction in the production numbers to -0.3%, a fall in trade numbers, and no change in the GDP figure of 0.0% is expected, which would keep the pair’s movement under check. 

On the flip side, the Sino-US and Iran-US headlines will remain under the focus because no critical data and events are scheduled from the United States.


Daily Support and Resistance

  • S3 1.2958
  • S2 1.3013
  • S1 1.3038
  • Pivot Point 1.3068
  • R1 1.3093
  • R2 1.3122
  • R3 1.3177

GBP/USD– Trading Tip

The GBP/USD continues to trade with bearish bias around 1.2980 after violating the 1.3045 support level. On the 4 hour timeframe, the pair has formed a strong bearish candle which is supporting the bearish trend in GBP/USD. In addition to this, the UK GDP and Manufacturing figures have also disappointed the market.

The pair is currently trading in a bearish channel, which is extending resistance around 1.3034 along with support around 1.2906. While the MACD is still staying in the selling zone. I will be looking to take sell trades below 1.3000 today to target 1.2925 and 1.2906. 

 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the bullish track and is trading just above the 100-week average, mainly due to the safe-haven Japanese yen lost ground in the wake of the Sino-US and Iran-US optimism. As of writing, the USD/JPY currency pair is currently trading at 109.64 and representing 0.17% gains on the day, as well as the pair consolidates in the range between the 109.50 – 109.65.

As we already mentioned, the anti-risk Japanese yen is losing ground in Asian trading hours due to risk-on sentiment in the market and pushing USD/JPY higher on the back of positive trade-related news flow. 

At the Sino-US front, the United States and China trade tensions continue to ease. Both countries are ready to sign an official trade deal this week. As well as, the White House Economic Advisor, Larry Kudlow, has said during the weekend that everything depends on the China trade deal. In contrast, the U.S. Treasury Secretary Steve Mnuchin told markets that there would be talks on the phase-two of the US-China trade deal when the Chinese delegates arrive on January 15.

Notably, the USD/JPY currency pair has failed many times to secure a weekly close above the key average since the last week of November. Moreover, the pair may face a hard time to beat a breakout because markets are likely to offer greenback on disinflation concerns. 

At the data front, the data released on Friday showed the average hourly earnings increased by just 2.9% year-on-year in December compared to the 3.1% projection. That was the first below-3% reading since July 2018. 

While the Nonfarm payrolls showed, the economy added 145K jobs in December, missing the expected print of 164K additions by a big margin.

Looking forward, the Sino-US and Iran-US headlines will remain under the focus because of no major data and events scheduled from the United States.

Daily Support and Resistance

  • S3 109.02
  • S2 109.28
  • S1 109.38
  • Pivot Point 109.54
  • R1 109.64
  • R2 109.8
  • R3 110.06

USD/JPY – Trading Tips

The USD/JPY pair is trading bullish around 109.820 after breaking above a resistance level of 109.550. The way USD/JPY has closed three while soldiers on the 4-hour timeframe, which is likely to extend buying trend until the next resistance level of 110.570.  

Leading indicators are massively overbought, and USD/JPY is looking for a reason to trigger bearish retracement. Let’s keep an eye on 110.570 level to capture a sell positon below level. All the best! 

Categories
Forex Course

44. Analyzing The Forex Market – Fundamental Analysis

Introduction

Introduction

Introduction

We’ve now come to one of the most exciting topics in this course, which is analyzing the Forex market. Now that we know the history and the working of the Forex market, we’re all set to predict the future of the market. Several types of analyses are used by traders across the world to analyze the  Forex market. However, these analyses can broadly be classified into three types.

In this lesson, and the lessons coming forward, we shall be discussing all these three types of analyses.

Types of Forex market analysis

The three types of forex market analysis are:

  1. Fundamental analysis
  2. Technical analysis
  3. Sentimental analysis

Now, you must be wondering which one of them is best for analyzing the markets. Well, if you look at the most successful professional traders in the industry, they analyze the market by considering all the types. In this lesson, let’s understand the most essential Fundamental Analysis.

Fundamental Analysis

Fundamental analysis, as the name pretty much suggests, is the way of analyzing the market by studying the economic, social, and political forces in the country. These factors are considered because they affect the supply and demand of an asset.

The whole idea of trading using fundamental analysis is by considering the factors that affect the supply and demand of a currency. These factors are technically referred to as fundamental or economic indicators.

The concept behind this type of analysis is straightforward. If a country’s currency or economic outlook is good, then there is a high probability that the currency will show strength in the future and vice-versa.

What are the major economic indicators?

Below are some of the economic indicators which have the power to shift the economic situation of a country.

Interest rates

One of the most popular and important economic indicators are interest rates. There are several types of interest rates, but we will be focusing on the basic form of the interest rates set by the central banks. Central banks are the creators of money. This money is borrowed by private banks. And the percentage (interest) or the principle the private banks pay to central banks for borrowing the money is called a nominal or a base interest rate.

If the central banks wish to boost the economy, they decrease the interest rates. This then stimulates borrowing by both private banks and other individuals. And this, in turn, increases consumption, production, and the overall economy. Lowering the interest rates can be a good way to inflate the economy but can be a poor strategy too. Because in the long term, low-interest rates can over-inflate the economy with cash and create an unbalance in the money supply.

So, to avoid this, central banks increase interest rates. And this increase results in less money in the hands of private banks, businesses, and individuals to play around with.

Inflation

Inflation, as the name pretty much says, is fluctuation in the cost of goods over time. Inflation, too, is a vital indicator for economists and investors to forecast the future economy. Inflation will have a good effect on the economy if done uniformly. But, too much inflation can bring the balance of supply and demand on the tip in favor of the supply. And this eventually will bring down the value of the currency.

Apart from these two, there are many other macroeconomic indicators that traders consider to do their fundamental analysis. Some of them include GDP, PPI, CPI, Unemployment Rate, Government Debt, etc. Indicators like these help the investors & traders in analyzing the market and predicting its future.

This completes the lesson on fundamental analysis. In the next lesson, let us understand the insights about technical analysis. Don’t forget to take the quiz below before moving ahead!

[wp_quiz id=”56601″]
Categories
Forex Market Analysis

Daily F.X. Analysis, January 10 – Top Trade Setups In Forex -NFP Figures in Highlights! 

The U.S. dollar strengthened for a third straight session on Thursday, ahead of the release of December nonfarm payrolls report due later today. The ICE Dollar Index gained 0.1% on the day to 97.42.

The U.S. dollar strengthened for a third straight session on Thursday, ahead of the release of December nonfarm payrolls report due later today. The ICE Dollar Index gained 0.1% on the day to 97.42.

The U.S. dollar strengthened for a third straight session on Thursday, ahead of the release of December nonfarm payrolls report due later today. The ICE Dollar Index gained 0.1% on the day to 97.42.

The euro was broadly flat at $1.1109. Official data showed that the eurozone’s jobless rate was steady at 7.5% in November as expected, while German industrial production grew 1.1% on the month (+0.8% estimated).

The British pound slipped 0.2% to $1.3069, posting a three-day decline. Bank of England Governor Mark Carney indicated that an interest rate cut may still be possible, saying, “there is a debate at the MPC (monetary policy committee) over the relative merits of near term stimulus to reinforce the expected recovery in U.K. growth and inflation.”

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair flat near the 1.11 and traders stay on the waiting mode ahead of the U.S. Nonfarm Payrolls report for December, which is scheduled to release at 13:30 GMT. As of writing, the EUR/USD currency pair is currently trading at 1.1109 and consolidates in the narrow range between the 1.1102 – 1.1111.

The currency pair charted a Doji candle Thursday because it marked two-way business and closed on a flat note. The Doji candle represents a lack of clear directional bias or indecision in the market place. 

Moving ahead, the pair may hit the bearish track if the U.S. Nonfarm Payrolls ignore expectations. Moreover, the United States economy expected to have added 164,000 new jobs in December, after increasing 226,000 positions during November. The unemployment rate is expected to remain stable at 305%, along with the participation rate is projected at 63.2%.

Meanwhile, Average Hourly Earnings are rising by 0.3% month-on-month and by 3.1% year-on-year, almost unchanged from the previous month.

According to the forecast, the positive report will likely support the dollar to gain across the board. In that case, EUR/USD will hit the bearish close below 1.1093. Although, in the case of a below-forecast NFP and wage growth figures, the shared currency may find bids, pushing the EUR/USD above 1.1120.

At the USD front, the greenback currency found on the bullish track because the markets await ahead of the NFP report. The U.S. Index is higher for the 3rd-consecutive day, trading back 97.50.

At the Sino-US front, the United States and China will possibly sign a phase one trade deal on January 15. However, any fresh is not coming yet regarding the Sino-US trade deal, but the trader keeps their eyes on January 15 for new impulse.

Looking forward, the Non-Farm Employment Change report is the trader radar, which is due to release at 13:30 GMT. Traders will also keep their focus on the Unemployment rate and Average Hourly Earnings, which are scheduled to release at the same time.



Daily Support and Resistance

  • S3 1.1014
  • S2 1.1067
  • S1 1.1086
  • Pivot Point 1.1121
  • R1 1.114
  • R2 1.1174
  • R3 1.1227

EUR/USD– Trading Tips

The EUR/USD is trading in a bearish mode below a crucial trading level of 1.1130, testing the support next level of 1.1100. This level worked as a support during the previous days, but this time it seems to get violated as the EUR/USD has formed a strong bearish candle. The MACD is trading below 0 levels, which is suggesting odds of the bearish trend continuation for the EUR/USD. 

On the 4 hour chart, the pair had formed a bullish channel that has now been violated at 1.1130 level, and now this can lead the EUR/USD prices towards 1.1077 level. 

GBP/USD– Daily Analysis

The GBP/USD closed at 1.30659 after placing a high of 1.31234 and a low of 1.30130. Overall the movement of GBP/USD remained bearish throughout the day.

The GBP/USD came under pressure after the Bank of England’s governor gave hints for an interest rate cut, and the pair GBP/USD dropped near 1.30 level.

On Thursday, the Governor of Bank of England, Mark Carney, dropped hints that interest rates could be cut soon to boost the British economy. He also warned that the BoE was running low on ways to fight the recession.

He said that the British economy had been sluggish recently, and the inflation was below the bank’s target of 2%. He added that if the weakness in the economy persisted the same, then the central bank could cut interest rates.

His comments put pressure on Britain Pound and sent it near 2-week lowest point against the U.S. dollar on Thursday. Mark Carney, in the previous monetary policy meeting of Bank of England, backed himself from cutting interest rates while 2 of nine policymakers were in favor of cutting rates to 0.5% from 0.75%.

He also said that there were tentative signs of stabilization in the global economy after a slowdown for almost 18 months, while the chances for Britain’s economy to drop still remain because of uncertainty after Boris Johnson’s election victory.

Regarding inflation, he said that the level of interest rates required to keep inflation steady would need to remain low for a prolonged period of time.

On the other hand, the U.S. dollar remained strong on Thursday amid positive job data from the U.S. labor department, which showed that jobless claims during the previous week decreased to 214K from expected 221K and supported U.S. dollar. The strong U.S. dollar added to the downward movement of GBP/USD.

Daily Support and Resistance

  • R3: 1.3296
  • R2: 1.3206
  • R1: 1.3151
  • Pivot Point 1.3116
  • S1: 1.3061
  • S2: 1.3026
  • S3: 1.2936

GBP/USD– Trading Tip

The GBP/USD continues to trade with bearish bias after violating the 1.3045 support level. On the 4 hour chart, the pair has closed a bearish engulfing candle under 1.3045 support level, which is a proof of bearish breakout. Below 1.3045, the GBP/USD has the potential to trade lower until 1.3000 level and even towards 1.2910 support zone. 

The leading indicators, such as RSI and MACD, are also supporting the bearish bias among traders. I will consider taking selling positions below 1.3058 to target 1.3000 today. 

 

USD/JPY – Daily Analysis

The USD/JPY closed at 109.514 after placing a high of 109.580 and a low of 109.010. Overall the movement of USD/JPY remained bullish throughout the day. The safe-haven Yen falls to 2-week lowest point against the U.S. dollar on Thursday amid the de-escalation of tensions between the U.S. & Iran after the targeted killing of Iranian general Qassem Soleimani by U.S. military.

On Wednesday, Iran, in retaliation against its general murder, dropped missiles on Iraqi airbases where U.S. troops were hosted. However, there were no American casualties that led to U.S. President Donald Trump to stop further military action against Iran. 

Instead, Trump announced economic & financial sanctions on Iran in response to Iranian airstrikes. Furthermore, the Iran officials also said that their missile attacks were to conclude the retaliation, and no more attacks will be made from them. Both parties backed from any escalation of military actions, and this gave pressure to safe-haven currencies like Yen.

Weaker Japanese Yen caused the USD/JPY to move in the reverse direction, and the pair moved to its 2-week highest level above 109.5.

On the other hand, the U.S. dollar remained strong across the board on the back of strong economic data and supportive comments from Federal Reserve officials.

At 1:00 GMT, the Consumer Credit from the U.S. Federal Reserve for November was released, which showed a decline to 12.5B from the expected 15.5B and weighed on the U.S. dollar. However, at 18:30 GMT, the Unemployment Claims from the U.S. Department of Labor dropped to 214K from forecasted 221K and supported the U.S. dollar.

   

Daily Support and Resistance

  • S3 106.93
  • S2 107.9
  • S1 108.49
  • Pivot Point 108.87
  • R1 109.46
  • R2 109.84
  • R3 110.81

USD/JPY – Trading Tips

The USD/JPY pair is trading bullish around 109.420 after breaking above a resistance level of 108.950. The way USD/JPY is forming bullish candles shows a strong buying bias among investors. We may see USD/JPY targeting the triple top resistance level around 109.700. 

Leading indicators are massively overbought, and USD/JPY is looking for a reason to trigger bearish retracement. 109.750 can offer this reason today. Let’s keep an eye on this level to capture a sell positon below this today. All the best! 

Categories
Crypto Market Analysis

Daily Crypto Review, Jan 09 – China announcing its cryptocurrency launch date

The cryptocurrency market got a well-deserved consolidation phase after the big moves to the upside it made over the past couple of days. As far as daily price changes go, Bitcoin’s price went down 4.88%. It is currently trading for $7,899. Meanwhile, Ethereum lost 3.74%, while XRP lost 3.55% on the day.

The cryptocurrency market got a well-deserved consolidation phase after the big moves to the upside it made over the past couple of days. As far as daily price changes go, Bitcoin’s price went down 4.88%. It is currently trading for $7,899. Meanwhile, Ethereum lost 3.74%, while XRP lost 3.55% on the day.

The cryptocurrency market got a well-deserved consolidation phase after the big moves to the upside it made over the past couple of days. As far as daily price changes go, Bitcoin’s price went down 4.88%. It is currently trading for $7,899. Meanwhile, Ethereum lost 3.74%, while XRP lost 3.55% on the day.

Lisk gained 23.41% on the day, making it the most prominent daily gainer. On the other side, Centrality lost 11.45% of its value when compared to yesterday, making it the biggest daily loser.

Bitcoin’s dominance fell quite drastically in the past 24 hours. Its dominance is now at 68.15, which represents an increase of 0.84% from yesterday’s value.

The cryptocurrency market capitalization decreased in the past 24 hours. It is currently valued at $209.65 billion. This value represents an increase of $8.83 billion when compared to yesterday’s value.

What happened in the past 24 hours

China announced that its nationwide blockchain network called the Blockchain-based Ser­vice Net­work (BSN) would be operational in April 2020. This is only six months after it’s testing phase started.

This project is fully backed by Chinese government policy. It is created to provide a platform on top of which new blockchain projects could be made, but also to help with the development of smart cities and the digital economy as a whole.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin is following the price movement that most analysts predicted so far. Even though it fell under the 200-day moving average (1-day time-frame) which it was under since November, this doesn’t have to be considered bearish at all. After creating an almost perfect head and shoulders pattern and breaking it to the upside, the true confirmation of a successful move would be a retracement to the neckline and then a burst in upwards momentum. This price movement seems exactly like a pullback that was expected.From a fundamental standpoint, Bitcoin is more and more bullish as the tension between the US and Iran rises.


Bitcoin’s price went under $8,000 and broke the $8,165 and $7,790 resistances.

Key levels to the upside                    Key levels to the downside

1: $7,990                                           1: $7,780

2: $8,165                                           2: $7,530

3: $8,640                                           3: $7,415

Ethereum

Ethereum didn’t have an additional day of gains, which resulted in it falling slightly less than Bitcoin. The consolidation above the $141.15 support line continues until the bearish pressure pushed the price below support.


Ethereum’s RSI moved away from the overbought territory and is currently in the lower value range. Its volume, on the other hand, is still above average.

Key levels to the upside                    Key levels to the downside

1: $141.15                                            1: $130

2: $148.5                                            2: $128.1

3: $154.2                                            3: 122.1

Ripple

XRP did not have a day last time we reported, as it was falling in price while other cryptocurrencies were either rising or consolidating sideways. However, XRP might have found a strong support line to consolidate at. After creating a downtrend line, which dates from two days ago, XRP managed to find its support at $0.205. The price is currently right at that level and is testing it to the downside.


XRP’s volume lower than yesterday, while its RSI moved out of the overbought territory and is currently moving towards oversold on all time-frames.

Key levels to the upside                    Key levels to the downside

1: $0.211                                           1: $0.205

2: $0.221                                           2: $0.1978

3: $0.227                                           3: 0.1892

Categories
Forex Market Analysis

Daily F.X. Analysis, January 8 – Top Trade Setups In Forex – Eyes on Trump’s Speech! 

On the forex front, the U.S. Dollar Index rebounded 0.3% on the day to 96.97 on Tuesday. The USD/JPY dipped 0.4% to 108.00, as U.S.-Iran tensions curbed investors’ risk appetite. This morning, the pair slid further to 107.67, the lowest level since mid-October, following reports that Iran has started attacks on U.S. targets in Iraq.

On the forex front, the U.S. Dollar Index rebounded 0.3% on the day to 96.97 on Tuesday. The USD/JPY dipped 0.4% to 108.00, as U.S.-Iran tensions curbed investors’ risk appetite. This morning, the pair slid further to 107.67, the lowest level since mid-October, following reports that Iran has started attacks on U.S. targets in Iraq.

On the forex front, the U.S. Dollar Index rebounded 0.3% on the day to 96.97 on Tuesday. The USD/JPY dipped 0.4% to 108.00, as U.S.-Iran tensions curbed investors’ risk appetite. This morning, the pair slid further to 107.67, the lowest level since mid-October, following reports that Iran has started attacks on U.S. targets in Iraq.

The Euro dropped 0.4% to $1.1154. Official data showed that the Eurozone’s CPI grew 1.3% on year in December (as expected), while retail sales in November rose 1.0% on the month (+0.7% expected). Later today, German factory orders for November will be released (+0.2% on month expected).

Economic Events to Watch Today

 

EUR/USD – Daily Analysis

The EUR/USD currency pair is representing limited gains, having hit the 5-day average resistance level at 1.1168 and looking to gain ground again mainly due to intensified geopolitical tensions. The EUR/USD pair is trading at 1.1147 and consolidates in the range between the 1.1145 – 1.1169.

The German data is due to come out at 06:00 GMT and expected to show Factory Orders rose by 0.3% month-on-month in November, having dropped by 0.4% in the preceding month. In year-on-year terms, factory orders are anticipated to have slipped by 5.5%. 

On the flip side, the positive reading may support the narrative that the German economy has bottomed out and will likely help the EUR/USD currency pair re-test resistance at 1.1206. The EUR currency will likely face losses if the data drops short of expectations by a significant margin. 

Daily Support and Resistance

  • S3 1.1042
  • S2 1.1101
  • S1 1.1127
  • Pivot Point 1.116
  • R1 1.1186
  • R2 1.1219
  • R3 1.1279

EUR/USD– Trading Tips

The EUR/USD is trading bearish around 1.1132, testing the support level of 1.1130. This level worked as a support during the previous days, the way Euro is forming candles, it seems to violate it pretty soon. On the 4 hour chart, the pair has formed a bullish channel that is keeping the EUR/USD supported near 1.1110. The MACD is just crossing below the 0 levels, which is suggesting odds of the bearish trend in the EUR/USD. At the same time, the bearish engulfing candle on the daily timeframe is adding further bearish bias on the EUR/USD pair. Let’s stay bearish below 1.1160 today. 

GBP/USD– Daily Analysis

The GBP/USD currency pair stay quite and consolidates in the narrow range between the 1.3105 – 1.3040 in the wake of the United States and Iran war fears. The GBP/USD currency pair is trading at 1.3119. Notably, the pair did not show a massive response to the early-day attack by Iran to the U.S.

The GBP traders gave a weak response to the greenback’s weakness amid Iran’s attack on the United States bases in Iraq. Apart from this, the USD dropped later when the United States did not take any action instantly.

As we already mentioned in the previous report that the UK PM Johnson would stick to his Brexit deadline, i.e., the end of 2020. Though, the previous headline suggested that the country will likely push the British leader towards a soft landing. The Bill of Tory leaders is still safe to the reaction of the opposition, mainly due to the clear majority of the ruling Conservatives. 

Although, the opposition Labour Party blamed the United Kingdom Prime Minister Boris Johnson of giving protection to the United States PM Donald Trump regarding the killing of Iran military general.

At the US-Iran war front, the United States President Donald Trump is also ready to speak on Iranian attacks over the U.S. bases in Baghdad and could affect the market’s moves. The U.S. ADP Employment Change and comments from Federal Reserve Governor Lael Brainard can also be the reason behind the pair moves.


Daily Support and Resistance

  • S3 1.2905
  • S2 1.3022
  • S1 1.3066
  • Pivot Point 1.314
  • R1 1.3184
  • R2 1.3257
  • R3 1.3375

GBP/USD– Trading Tip

The GBP/USD is also trading bullish around 1.3185 due to weakness in the U.S. dollar. The recent bullish engulfing candle is suggesting odds of bullish trend continuation in the GBP/USD pair. 

On the higher side, the GBP/USD may find resistance near 1.3185 level today while the support still stays at 1.3060. A bullish breakout of 1.3185 level can extend the bullish trend until 1.3285. Let’s stay bullish above 1.3125 today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair dropped to 108.00, having hit the low of 107.83, mainly due to the risk-off market sentiment in the wake of Iran’s missile attacks on the U.S. airbases in Iraq earlier today. But currently, the USD/JPY currency pair has recovered to 108.50 but failed near the 108.45 due to risk recovery after confirmed that no damages have been seen by the United States President Donald Trump from the Iranian attacks. 

The USD/JPY pair is currently trading at 108.38 and consolidates in the range between the 107.64 – 108.53. More than one dozen missies have been reportedly launched at the Ain Assad Air Base. White House answers that they are aware of the attack, and the U.S. President Trump has been briefed, and he is monitoring the situation.

It is worth to mention that the United States President Donal Trump will make a statement tonight. With this, the U.S. Defense Secretary Esper and U.S. Secretary of State Pompeo have arrived at the White House. On the other hand, Iran’s guards warn the U.S. any aggression against Tehran will get a worse response.

Meanwhile, the market’s risk tone recently weakened with the U.S. 10-year Treasury yields slipping more than seven pips to 1.75%, whereas the S&P 500 Futures are losing more than 1% to 3,200 by the press time.

Looking forward, the traders will now keep their eyes on further progress surrounding the US-Iran tension for fresh direction. At the economic front, Japan’s Consumer Confidence for December and the US ADP Employment Change, an early signal to Friday’s NFP, will be closely observed.

Daily Support and Resistance

  • S3 106.54
  • S2 107.34
  • S1 107.66
  • Pivot Point 108.14
  • R1 108.46
  • R2 108.95
  • R3 109.75

USD/JPY – Trading Tips

The USD/JPY pair is trading bullish around 108.720, which marks 50% Fibonacci retracement on the 240 minutes chart. The pair is pretty much likely to surge higher to complete th2 61.8% Fibonacci retracement at 108.950. 

The MACD is forming bigger histograms than before, which indicates the positive sentiment of traders. Lastly, the 4 hour time has formed three white soldiers pattern, which is likely to keep the USD/JPY bullish today. Consider taking buying trades above 108.500 to target 108.950. 

All the best!

Categories
Forex Economic Indicators Forex Fundamental Analysis

How the Trade Balance Affects the Forex Market

 

 

 

We can define Trade Balance as the difference in value between exported and imported goods and services for a designated time period. It can also be referred to as trade deficit/surplus. A trade deficit occurs if more products and services are imported than exported. A trade surplus happens if there are more goods and services which are exported than imported.

Every country produces goods and services. These can be consumed locally or exported to other countries for foreign exchange earnings. No country is entirely self-sufficient. Therefore it will also import goods and services that are beneficial to their economy from other countries, thus, paying the cost using foreign exchange. That is is the trade process that countries engage in. The Trade Balance is the comparison between the amount earned from the exports and the amount spent on foreign exchange for its imports. This can also be referred to as the balance of trade.

 

What factors affect the Trade Balance

Factors affecting the balance of trade include:

  1. a) Production costs, which includes land, labor, capital, taxes, incentives, etc. in the exporting country and the same applies to those in the importing economy;
  2. b) The cost and availability of resources which include raw materials, intermediate goods, and other inputs;
  3. c) Fluctuations in the exchange rate;
  4. d) Taxes and limitations on trade;
  5. e) Non-tariff barriers such as health, safety standards and environmental;
  6. f) The availability (or lack of it) of foreign currency to pay for imports; and
  7. g) Prices of domestic manufactured goods.

 

Why are Trade Balance Figures Relevant to Forex Traders?

Manufacturing, employment, and consumption are what make up international commerce and trade. Imports and exports attract demand and, as a result, are directly linked to the need for both local or foreign currencies. A country should use international currency reserves when they conduct international trade, and the dynamics between imports and exports will dictate which side employment will be generated. Consumer spending and habits will be affected by the kind of goods imported into a country and which are manufactured in a country for local consumption or export.

The Trade Balance report carries a high market impact as manufacturing, employment, and consumer spending/consumption are factors that significantly affect the state of a countries economy. Also, the trade balance has a direct impact on a country’s Gross Domestic Product (GDP).

 

How does a Trade Balance report influence the respective currencies?

Net Importers – A net importer country has more imports than exports. Therefore it will need access to a large amount of foreign currency to fund the cost of its imports. An increased supply of the local currency coupled with a growing demand for foreign money will lead to a depreciation of the local currency.

An imbalance in the Balance of Trade which sways towards importation will lead to layoffs in

the manufacturing sector and thus increase unemployment and will cause a depreciation in the value of the local currency.

Net Exporters – A country that is a net exporter will export more goods than they import and have a demand from foreign sources for the cost into the local currency. Increased demand in export will also lead to increased manufacturing, which creates jobs and drives consumer spending and consumption and will cause the value of the local currency to appreciate.

Summary

  • Increased deficit, when imports exceed exports, is bad for the local currency.
  • Increased surplus, when exports exceed imports, is good for the local currency.

The Trade Balance report

The Trade Balance report is issued on a monthly basis, and covers the period of the previous month, which is under review. The most important reports are released from the US, Canada, Australia, New Zealand, United Kingdom, European Union countries, and China. Below you can peruse the various data from the major players.

 

GBP (Sterling) – https://tradingeconomics.com/united-kingdom/balance-of-trade

AUD – https://tradingeconomics.com/australia/balance-of-trade

USD – https://tradingeconomics.com/united-states/balance-of-trade

CHF – https://tradingeconomics.com/switzerland/balance-of-trade

EUR – https://tradingeconomics.com/euro-area/balance-of-trade

CAD – https://tradingeconomics.com/canada/balance-of-trade

NZD – https://tradingeconomics.com/new-zealand/balance-of-trade

JPY – https://tradingeconomics.com/japan/balance-of-trade

 

In conclusion

It is important to keep an eye o Trade Balance reports, as they show the overall health of the respective country. A country that is facing a high rate of unemployment and falling into a bad state of affairs in manufacturing will benefit from a positive trade balance report more than a country where these are not huge concerns. The trade balance report is a crucial piece of fundamental analysis for a trader to use in order to maximise the effectiveness of his trades.

 

Categories
Forex Market Analysis

Daily F.X. Analysis, January 6 – Top Trade Setups In Forex – U.S. Iran Shakes The Market! 

On the forex front, the U.S. Dollar Index was little changed at 96.84 on Friday. Being regarded as a haven-asset, the Japanese yen strengthened against the greenback as geopolitical risks increased. USD/JPY dropped 0.5% to 108.09, the lowest level since mid-October.

On the forex front, the U.S. Dollar Index was little changed at 96.84 on Friday. Being regarded as a haven-asset, the Japanese yen strengthened against the greenback as geopolitical risks increased. USD/JPY dropped 0.5% to 108.09, the lowest level since mid-October.

On the forex front, the U.S. Dollar Index was little changed at 96.84 on Friday. Being regarded as a haven-asset, the Japanese yen strengthened against the greenback as geopolitical risks increased. USD/JPY dropped 0.5% to 108.09, the lowest level since mid-October.

The euro slipped 0.1% to $1.1160. Official data showed that German’s jobless rate was steady at 5.0% in December as expected, while CPI grew 1.5% on year (+1.4% expected). 

Besides, Iran vowed “severe revenge” on the U.S., while President Donald Trump threatened major retaliation on Iran if they do anything.

Economic Events to Watch Today

 EUR/USD – Daily Analysis

The EUR/USD currency pair hit the bullish track mainly due to U.S. Treasury yields, which dropped in the wake of risk-off sentiment. Besides, the greenback is also struggling to gain the ground. The EUR/USD pair is consolidating at 1.1164, consolidating in the range between the 1.1156 – 1.1172. 

The on-going tension between the United States and Iran further intensified during the weekend after Iran’s supreme leader Ayatollah Ali Khamenei’s statement that Iran would take revenge for the U.S. killing of Iranian general Soleimani. The country also announced that it would not follow any restrictions imposed by the 2015 nuclear deal.

On the other hand, the United States President Donald Trump also gave warning regarding retaliation if the Iran attacks on United States personnel or assets.

The yield on the United States ten-year Treasury note dropped to a one-month low of 1.757% in Asia and is currently seen at 1.777% – down ten basis points on the day.

At the data front, the German retail sale for November and final PMI indices for December are scheduled for release. However, these data will likely avoid in the wake of geopolitical development.



Daily Support and Resistance

  • S3 1.1082
  • S2 1.1133
  • S1 1.1153
  • Pivot Point 1.1183
  • R1 1.1203
  • R2 1.1234
  • R3 1.1284

EUR/USD– Trading Tips

On the 2 hour chart, the EUR/USD has tested the support level of 1.1130, which was being extended by the old triangle pattern. The U.S. Iran war sentiments are making EUR/USD weaker and are very likely to drive bullish bias until 1.1200 and 1.1245 level today. 

Speaking about the leading indicators, the RSI and MACD are holding in the buying zone, demonstrating the bullish trend in the EUR/USD pair today. Consider staying bullish until 1.1240 today.

 

GBP/USD– Daily Analysis

The GBP/USD currency pair shifted to bullish track from the two-day losing streak, mainly due to broad-based greenback weakness. As of writing, the GBP/USD is trading at 1.3160.

Just like the EUR/USD, the GBP/USD is also being influenced by the geopolitical tensions. On-going tension between the United States and Iran further intensified during the weekend after Iran’s supreme leader Ayatollah Ali Khamenei’s statement that Iran would take revenge for the U.S. killing of Iranian general Soleimani. The country also announced that it will not follow any restrictions imposed by the 2015 nuclear deal. As a result, the U.S. dollar is getting weaker.

At the Brexit front, the United Kingdoms’ opposition Labour Party will decide the schedule for the election to choose the next leader on Monday. Moreover, it seems like the contender Keir Starmer already accepted the Brexit while Jess Phillips says if Brexit fails, she will likely to rejoin the European Union.

The United Kingdom Prime Minister will meet the Ursula von der Leyen, European Commission President on Wednesday, and will likely discuss the Brexit process ahead. However, the daily mail hints that the senior Tory leaders are supporting Boris Johnson to kick off parallel post-Brexit trade talks with the U.S. to put pressure on the E.U. 


Daily Support and Resistance

  • S3 1.2932
  • S2 1.3047
  • S1 1.3094
  • Pivot Point 1.3163
  • R1 1.321
  • R2 1.3278
  • R3 1.3393

GBP/USD– Trading Tip

The GBP/USD is also trading bullish around 1.3185 due to weakness in the U.S. dollar. The recent bullish engulfing candle is suggesting odds of bullish trend continuation in the GBP/USD pair. 

On the higher side, the GBP/USD may find resistance near 1.3185 level today while the support still stays at 1.3060. A bullish breakout of 1.3185 level can extend the bullish trend until 1.3285. Let’s stay bullish above 1.3125 today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair found on the bearish track due to the risk-off sentiment in the market and a greenback’s weakness. The USD/JPY pair is trading at 108.00 and consolidates in the range between the 107.77 – 108.12.

On the front of main headlines, the on-going tension between the United States and Iran further intensified during the weekend after Iran’s supreme leader Ayatollah Ali Khamenei’s statement that Iran would take revenge for the U.S. killing of Iranian general Soleimani. As a consequence, the markets have turned into risk-off sentiment, boosting demand for safe-haven assets like U.S. treasury, gold, and Japanese yen.

On the other hand, the United States President Donald Trump also gave warning regarding retaliation if Iran attacks the United States personnel or assets. Notably, we can expect further conflicting updates.

The United States’ two-year Treasury yields declined from 1.57% to 1.51%, the lowest since early Nov, ten-year yields from 1.88% to 1.79%. Markets are pricing a near-zero chance of rate cut at the next Fed meeting on January 29 but a terminal rate of 1.28%.

Daily Support and Resistance

  • S3 107.24
  • S2 107.9
  • S1 108.23
  • Pivot Point 108.55
  • R1 108.89
  • R2 109.2
  • R3 109.86

USD/JPY – Trading Tips

The USD/JPY is trading in a bearish channel, which is keeping it support near 107.750 for now. At the same time, the resistance is likely to be found around 108.250. The RSI and MACD are staying above 50 and 0, suggesting a bullish trend in the USD/JPY.

Technically the pair has the potential to drop further until 107.800 level, and violation of this could extend selling until 107.600. All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, January 3 – Top Trade Setups In Forex – FOMC Meeting Minutes Ahead! 

On the forex front, the U.S. Dollar Index rebounded from its six-month low, gaining 0.4% on the day to 96.80. The investor will focus on the Federal Reserve’s latest monetary policy meeting minutes due later in the day. In Asian trading hours, safe-haven demand surged as the U.S. Defense Department confirmed that the U.S. military, “at the direction of the president,” killed Iranian general Qassem Soleimani in an airstrike in Iraq.

On the forex front, the U.S. Dollar Index rebounded from its six-month low, gaining 0.4% on the day to 96.80. The investor will focus on the Federal Reserve’s latest monetary policy meeting minutes due later in the day. In Asian trading hours, safe-haven demand surged as the U.S. Defense Department confirmed that the U.S. military, “at the direction of the president,” killed Iranian general Qassem Soleimani in an airstrike in Iraq.

On the forex front, the U.S. Dollar Index rebounded from its six-month low, gaining 0.4% on the day to 96.80. The investor will focus on the Federal Reserve’s latest monetary policy meeting minutes due later in the day. In Asian trading hours, safe-haven demand surged as the U.S. Defense Department confirmed that the U.S. military, “at the direction of the president,” killed Iranian general Qassem Soleimani in an airstrike in Iraq.

Economic Events to Watch Today

Economic Calendar by TradingView

 

EUR/USD – Daily Analysis

The Euro dropped 0.4% to $1.1171. Later today, German’s December jobless rate (steady at 5.0% expected) and CPI data (+1.4% on-year expected) will be reported. The contracted manufacturing PMI from Germany at the end of 2019 weighed on single currency Euro and dragged the pair EUR/USD below 1.120 on Thursday. 

On the other hand, the U.S. dollar rose today after a week on the release of U.S. initial jobless claims for December. The jobless claims for the previous week were in line with the expectations and supported the U.S. dollar.

The labor market of the United States showed signs of improvement, and American markets reacted positively to renewed hopes of growth in consumer spending. This could mean that the U.S. economy would grow with a moderate rate in 2020.

Meanwhile, the US-China trade deal developments had given some ease to the ongoing global economic slowdown when it was confirmed that the phase-one deal between the world’s two largest economies would be signed in mid –January. The strong U.S. dollar and weak Euro dragged the EUR/USD pair at the start of the New Year.


Daily Support and Resistance

  • R3: 1.1284
  • R2: 1.1234
  • R1: 1.1203
  • Pivot Point 1.1183
  • S1: 1.1153
  • S2: 1.1133
  • S3: 1.1082

EUR/USD– Trading Tips

Technically, the pair is trading at 1.1135, which is very closer to the bearish trendline support area of 1.1125. On the lower side, the EUR/USD is likely to find support around 1.1100 areas, which previously worked as a resistance for the EUR/USD. On the higher side, the EUR/USD may find resistance near 1.1150 and 1.1185 today.  

The RSI and MACD are holding in the bearish zone, suggesting chances of the bearish trend in the EUR/USD pair. Let’s stay bearish below 1.1180 and bullish above 1.1110 today. 

GBP/USD– Daily Analysis

The British pound sank 0.8% to $1.3147, halting a six-day rally. Research firm Markit will release U.K. Construction PMI for December (45.9 expected). However, Boris Johnson has pledged that U.K. would leave E.U. on January 31 and has announced to make his Brexit deal as a law in case no transaction was secured by the end of 2020 with E.U. in terms of trade.

PM Johnson insisted that 11 months period was enough to reach a trade deal with E.U., but critics have argued that the timetable was too tight and could lead to a no-deal Brexit. This has been weighing on British Pound, and hence, GBP/USD started to fell at the start of the New Year.

Meanwhile, the U.S. dollar gained traction in the market after the losses of 6 consecutive days on Thursday. 

The trader’s comeback after the holidays gave strength to the U.S. dollar when they re-entered in the market, and the volume of trades increased. Strong U.S. dollar added in the pressure of GBP/USD and caused the pair to lose its gains from the previous day.

Daily Support and Resistance

  • R3: 1.3393
  • R2: 1.3278
  • R1: 1.321
  • Pivot Point 1.3163
  • S1: 1.3094
  • S2: 1.3047
  • S3: 1.2932

GBP/USD– Trading Tip

Just like the EUR/USD, the GBP/USD pair has also completed a bearish retracement until 1.3045, which marks 61.8% Fibonacci Retracement area. Three black crows on the 2-hour chart are signifying bearish bias among traders. At the moment, the Cable is trading around 1.3050 level, and it may surge a bit above the 1.3045 area to target 1.3150 today. 

USD/JPY – Daily Analysis

The USD/JPY closed at 108.566 after placing a high of 108.864 and a low of 108.210. Overall the trend for USD/JPY remained bearish that day.

At 5:30 GMT, the Annual Challenger Job Cuts form the United States came in as-25.2% in comparison to the previous -16.0%. At 6:30 GMT, the Unemployment Claims for the last week from the United States came in line with the expected 222K. AT 7:45 GMT, the Final Manufacturing PMI for December forms the United States was dropped to 52.4 from the expectations of 52.5 and weighed on the U.S. dollar.

The decline in the Manufacturing activity in the United States at the end of 2019 gave pressure to the U.S. dollar and dragged USD/JPY for 4th consecutive day on Thursday to the level of 108.2.

The US-China trade deal optimism gave strength to the U.S. dollar when it failed to grow the economy of China. In response to what, on Wednesday, the Chinese Central Bank announced that it was diminishing the quantity of cash that all banks need to hold as reserves around $15B. This move from China’s Central Bank was taken to improve the economic condition of the country.

Daily Support and Resistance

  • R3: 109.86
  • R2: 109.2
  • R1: 108.89
  • Pivot Point 108.55
  • S1: 108.23
  • S2: 107.9
  • S3: 107.24

USD/JPY – Trading Tips

The USD/JPY was facing triple bottom support around108.400 level, which has now been violated after the USD/JPY completed 23.6% retracement at 108.700. The USD/JPY pair is trading in a bearish channel, which is likely to keep this pair bearish below 107.900. 

At the moment, the pair may find immediate support near 107.900, and violation of this could extend sell-off until 107.500. While resistance holds around 108.250 today, consider taking sell trades below 108.200 today.

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, January 2 – Top Trade Setups In Forex – Trading Back to Normal! 

The U.S. dollar weakened against its major pairs on Tuesday. The ICE Dollar Index dropped 0.2% on the day to 96.53. U.S. President Donald Trump announced he would approve the phase one trade deal with China at the White House on January 15. Meanwhile, China’s central bank announced that it would lower the required reserve ratio for commercial banks by 50 basis points from January 6, releasing 800 billion yuan of liquidity into the financial system.

The U.S. dollar weakened against its major pairs on Tuesday. The ICE Dollar Index dropped 0.2% on the day to 96.53. U.S. President Donald Trump announced he would approve the phase one trade deal with China at the White House on January 15. Meanwhile, China’s central bank announced that it would lower the required reserve ratio for commercial banks by 50 basis points from January 6, releasing 800 billion yuan of liquidity into the financial system.

The U.S. dollar weakened against its major pairs on Tuesday. The ICE Dollar Index dropped 0.2% on the day to 96.53. U.S. President Donald Trump announced he would approve the phase one trade deal with China at the White House on January 15. Meanwhile, China’s central bank announced that it would lower the required reserve ratio for commercial banks by 50 basis points from January 6, releasing 800 billion yuan of liquidity into the financial system.

Economic Events to Watch Today

Let’s took at these fundamentals.

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair hit the biggest-quarter high since the third quarter of 2017, possibly due to the optimism surrounding the United States and China trade deal. As of writing, the EUR/USD currency pair increased by 2.8% in the 4th quarter and currently trading at 1.1213. 

The pair remains above critical Fibonacci level, i.e., 61.8% Fibonacci retracement of June-October declines, at 1.1210 now. Eventually, the currency pair has started 2020 with the bullish sentiment.

The continued optimism surrounding the US-China trade deal and signs of stability in the Eurozone economy support further gains in the EUR currency. 

On the flip side, the latest report from the People’s Bank of China’s (PBOC) regarding stimulating growth is also supportive news for the EUR currency as China is Eurozone’s biggest trading partner. 

People’s Bank of China (PBOC) announced 50 basis points into the Reserve Ratio Requirement (RRR) cut, which is scheduled to deliver on January 5. Besides this, commercial bankers will hold a reserve of 12.5% of their assets from now, while 10.5% for smaller institutions. 


Daily Support and Resistance

  • S3 1.1196
  • S2 1.1205
  • S1 1.1209
  • Pivot Point 1.1213
  • R1 1.1218
  • R2 1.1222
  • R3 1.123

EUR/USD– Trading Tips

On the technical side, the long upper wick attached to Tuesday’s candle is a tell-tale sign of buyer exhaustion. Meanwhile, the 4-hour chart is reporting a bearish divergence of the relative strength index and the MACD histogram. 

 

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing red and dropped to 1.3210, mainly due to the fears of hard Brexit and thin trading conditions. As of writing, the currency pair is currently trading at 1.3221 and consolidates in the range between the 1.3202 – 1.3266. The Cable recently turned into bearish mode from the two-weeks high.

The market’s risk sentiment has recovered due to increasing optimism surrounding the US-China trade deal. However, the greenback recovers at the start of 2020. As a result, the U.S. ten-year treasury yields and stocks are moderately positive.

Whereas the holidays in Japan and New Zealand will keep the market’s sentiment light, all traders will keep their eyes on the trade/Brexit. December’s manufacturing PMI data from the U.S. and the U.K. will also be the key to watch.

If no significant change comes from the UK/US data, a downbeat figure against 47.4 prior and 47.6 expected will likely increase the chances of further rate cuts from the Bank of England (BOE).


Daily Support and Resistance

  • S3 1.3217
  • S2 1.3235
  • S1 1.3244
  • Pivot Point 1.3253
  • R1 1.3262
  • R2 1.3271
  • R3 1.3289

GBP/USD– Trading Tip

On the technical side, the 61.8% Fibonacci retracement of its December 12-23 fall, to around 1.3285, restricts the pair’s immediate upside, which in turn increases the chances of a pullback to 50% and 38.2% Fibonacci retracement levels of 1.3210 and 1.3135 respectively.

The GBP/USD has broken the support mark of 1.3060, and currently, this level is expected to serve as a resistance for the GBP/USD. On the downside, the GBP/USD can exhibit further selling until the next target level of 1.2940.

USD/JPY – Daily Analysis

The USD/JPY currency pair stuck between the range of 108.60 – 108.75 and took some gain due to risk-on sentiment in the wake of the Chinese central bank’s rate cut. Moreover, the optimism surrounding the United States and China trade deal relations also play their role. 

The tensions of the Middle East and holidays in Asia’s major parts continue to limit the market’s reaction because traders are cautious ahead of the key data from China.

It is worth to mention that China’s People’s Bank of China (PBOC) gave an announcement regarding 50 basis points into the Reserve Ratio Requirement (RRR) cut, which is scheduled to deliver on January 5. As well as, major banks will hold a reserve of 12.5% of their assets from now, while 10.5% for smaller institutions. 

Moreover, the announcement came from the PBOC that financial institutions should stop doing the 1-year lending rate as its reference rate while start with the Loan Prime Rate as the base rate beginning January 1.

At the Sino-US front, the United States President Donald Trump’s tweeted about the confirmation of phase-one singing in a ceremony on January 15. Meanwhile, the Republican leader also said that he would later go to China to discuss the phase-2 of the deal. Eventually, the White House Advisor, Peter Navarro, also said that more positive deals with China are coming this 2020.

On the other hand, the market holidays in Japan and New Zealand limit the latest news reaction because the trader waits for the China Caixin Manufacturing PMI data for December. Apart from this, there is another reason behind the lack of smiling welcome to 2020 is the political war between the United States and the Middle East after the Pentagon’s defensive strikes into Iraq and Syria.

At the data front, the data becomes even more critical due to the latest official figures confirms the continued manufacturing recovery. Forecasts suggest 51.7 values against 51.8. Looking forward, the traders will closely follow the U.S. Markit Manufacturing PMI for fresh direction.


Daily Support and Resistance

  • S3 108.48
  • S2 108.61
  • S1 108.69
  • Pivot Point 108.74
  • R1 108.81
  • R2 108.86
  • R3 108.99

USD/JPY – Trading Tips

The USD/JPY was facing triple bottom support near 108.400 level, which has pushed the USD/JPY higher towards a 23.6% retracement level of 108.700. Above this, the pair has the potential to go for 38.2% Fibo levels, which marks 108.900 resistance. 

Below the 108.900 level, we can expect a slight bearish reversal in the USD/JPY currency pairs until 108.600.  

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 27 – Top Trade Setups In Forex – Weaker Dollar In-Play

On the forex front, the U.S. Dollar Index was little changed at 97.65 in thin holiday trading. The Euro edged up 0.1% to $1.1101, and the British pound gained 0.3% to $1.3001. The USD/JPY climbed 0.2% to 109.54.

On the forex front, the U.S. Dollar Index was little changed at 97.65 in thin holiday trading. The Euro edged up 0.1% to $1.1101, and the British pound gained 0.3% to $1.3001. The USD/JPY climbed 0.2% to 109.54.

On the forex front, the U.S. Dollar Index was little changed at 97.65 in thin holiday trading. The Euro edged up 0.1% to $1.1101, and the British pound gained 0.3% to $1.3001. The USD/JPY climbed 0.2% to 109.54.

The U.S. Labor Department reported that initial jobless claims fell to 222,000 in the week ended December 21 (220k expected) from 235,000 in the prior week. Today, the focus is going to be on the technical side of the market as the economic calendar remains muted. 

Economic Events to Watch Today

Let’s took at these fundamentals.

  

EUR/USD – Daily Analysis

The EUR/USD edged up 0.1% to $1.1101, and the British pound gained 0.3% to $1.3001. The U.S. President Donald Trump said on Tuesday that he and Chinese President Xi Jinping would have a ceremony to sign the phase-one of the trade deal reached earlier this month. 

Mr. Lowe also added that the E.U. was failing, so they rammed the Euro in. He said that Euro was destined to fail and would have collapsed by now if it was not for massive quantitative easing by ECB.

On the other hand, the macroeconomic calendar remained empty on Thursday except for the U.S. jobless claims for the previous week. The U.S. unemployment claims during last week were recorded as 222K, which came in line with the expectations. 

Daily Support and Resistance

  • S3 1.0974
  • S2 1.1031
  • S1 1.1053

Pivot Point 1.1089

  • R1 1.1111
  • R2 1.1146
  • R3   1.1203

EUR/USD– Trading Tips

The EUR/USD is trading with the slightly bearish sentiment, and it’s very likely to test the next support area around 1.1110 on the 4-hour chart. The bearish breakout of this level can trigger further selling until 1.1085. Conversely, the bullish bias can lead the EUR/USD to 1.1125 and 1.1160 resistance levels. Let’s wait for the buy trade above 1.1110 today.  

 

GBP/USD– Daily Analysis

The GBP/USD gained 0.3% to $1.3001. Boris Johnson has announced to make his Brexit deal as law, and in case of not reaching a trade deal with E.U. by the end of next year, then U.K. will leave E.U. without any agreement. However, it was highly unlikely because PM Johnson now holds the majority of the U.K. Parliament. 

The Parliament has already approved his deal for leaving E.U., and there are fewer chances that E.U. & U.K. will not reach a trade deal. Furthermore, PM Johnson has also said that he would make sure the departure of the U.K. from the European Union on January 31.

The British economy has been showing weaknesses for some time, and it is possible that Bank of England would start easing its monetary policy soon, which will drag the GBP/USD pair back from 1.30 level.

In the U.K., the British Banker’s Association will report November finance loans for housing (41.2 billion pounds expected).

Daily Support and Resistance

  • S3 1.2757
  • S2 1.2901
  • S1 1.2955

Pivot Point 1.3044

  • R1 1.3099
  • R2 1.3188
  • R3 1.3331

GBP/USD– Trading Tip

The GBP/USD has broken the support mark of 1.3060, and currently, this level is expected to serve as a resistance for the GBP/USD. On the downside, the GBP/USD can exhibit further selling until the next target level of 1.2940.

The RSI and MACD have now crossed over 50 and 0 zone, suggesting odds of a bullish reversal in the GBP/USD pair. Consider staying bullish above 1.2995 and bearish below 1.3100 today. 

USD/JPY – Daily Analysis

The USD/JPY fell to 109.48. This morning, official data showed that Japan’s jobless rate dropped to 2.2% in November (2.4% expected and in October), while industrial production slid 0.9% on the month (-1.0% expected). Also, retail sales grew 4.5% (+5.0% expected).

The Bank of Japan Governor Haruhiko Kuroda said on Thursday that the central bank would ease its monetary policy further without hesitation if the momentum toward its 2% inflation goal came under threat.

He also offered a brighter view of the global economic outlook and said that the Bank of Japan would not rush to change its current policy for now. After a week after Central bank kept its short term rates target at -0.1% and long-term at 0%, Kuroda said that the trend of Japan’s economy was at moderate growth.

However, the easing of global trade tensions has reduced the chances that the central bank would ease its monetary policy further. Reduction in uncertainties over the US-China trade war has played an essential role in facilitating global economic conditions.

Daily Support and Resistance

  • S3 108.56
  • S2 108.97
  • S1 109.17

Pivot Point 109.38

  • R1 109.58
  • R2 109.8
  • R3 110.21

USD/JPY – Trading Tips

The USD/JPY has already completed the 38.2% Fibonacci retracement around 109.200 level. Now, this level is supporting the safe-haven pair along with an immediate resistance around 109.350. 

The RSI and MACD are suggesting chances of further selling in the USD/JPY pair. The pair may trade bearish below 109.50 to target 109.200 and even below to 108.950 today. 

All the best!

Categories
Forex Economic Indicators Forex Fundamental Analysis

What you should know about Government Debt to GDP

What is the Government Debt to GDP?

What is the Government Debt to GDP?

What is the Government Debt to GDP?

The government Debt-to-GDP ratio is simply the ratio between the country’s total GDP (Gross Domestic Product) to its total debt. It is computed by dividing the total debt the nation has in a particular year to that of the GDP figure for that year.

As it is a ratio, this indicator is represented in percentage. The debt-to-GDP ratio indicates the country’s capability to repay its debts. If the debt-to-GDP ratio of a country is high, it means that the country might struggle to pay back the debt it has incurred. If this ratio is nominally high, then there is a high likelihood that the country is more likely to default on payments and fail to repay the debt. If the debt-to-GDP ratio is low, then the country is in a stable financial position to repay the debt.

This ratio is also useful to help determine the number of years that a country would need in order to pay back the debt if the total GDP is solely dedicated to the repayment. The debt-to-GDP ratio also measures the financial leverage of an economy.

 

What Does the Debt-to-GDP Ratio Tell You?

A financial panic in domestic and international markets is triggered when a country is unable to repay its debt. Governments will strive to lower their debt-to-GDP ratios. However, this can be difficult during periods of unrest or when the country is in an economic recession. When this occurs, governments like to increase borrowing in an attempt to stimulate economic growth.

Some economists adhere to the modern monetary theory (MMT), which argues that sovereign nations that are capable of printing their own money can’t go bankrupt as they can simply print more fiat currency to cover their debts. However, the nations of European Union (EU), who have to rely on the European Central Bank (ECB) to issue euros, do not apply to this rule because they do not control their own monetary policies.

A  recent study by the World Bank found that countries whose debt-to-GDP ratios exceed 77% for extended periods will experience a slowdown in economic growth. It is important to note that every percentage point of debt above this level costs countries 1.7% in economic growth and is even more pronounced in the emerging markets, where each additional percentage point of debt over 64%, annually slows growth by 2%.

Sources of information on ‘Debt to GDP Ratio’ for Major currencies:

In the sources below, there is a lot of information with respect to the Debt to GDP ratio. You can acquaint yourself with the Debt to GDP ratio for the respective country in addition to the historical data related to that country’s Debt to GDP ratio. This graphical representation of the historical Debt to GDP ratio data will leave you with a clearer understanding of how these ratios can change over time.

World Bank – https://datacatalog.worldbank.org/dataset/quarterly-public-sector-debt

GBP (Sterling) – https://tradingeconomics.com/united-kingdom/government-debt-to-gdp

AUD – https://tradingeconomics.com/australia/government-debt-to-gdp

USD – https://tradingeconomics.com/united-states/government-debt-to-gdp

CHF – https://tradingeconomics.com/switzerland/government-debt-to-gdp

EUR – https://tradingeconomics.com/euro-area/government-debt-to-gdp

CAD – https://tradingeconomics.com/canada/government-debt-to-gdp

NZD – https://tradingeconomics.com/new-zealand/government-debt-to-gdp

JPY – https://tradingeconomics.com/japan/government-debt-to-gdp

 

Frequency of release

Public Debt figures are released quarterly by the World Bank and the International Monetary Fund (IMF), therefore, investors and agency ratings are able to compute this ratio on a quarterly basis.

What do traders care about the Debt to GDP ratio and its impact on the currency?

As we already know, the government debt to GDP ratio indicates the ability of a country to repay its debt, and a higher Debt to GDP ratio for an extended period of time means that the country is more likely to get default on its debt. This leads the foreign banks and governments to lend more money to these countries, and they increase their interest rates to mitigate the high risk involved. Aa a result, the economy of the country will slow down when there is a high debt to GDP ratio. A weak economy can indicate that there may be depreciation of that currency. This is why this ratio will be an essential factor for forex traders to consider when they trade on the Forex market.

The bottom line

If a country has a high debt-to-GDP ratio for an extended amount of time, it can indicate a recession as a country’s GDP will go down in a recession. This will also affect the people living in that country as governments tend to increase taxes to keep up the revenue. The lending governments will have more faith in the county to repay their debts if there is a high return on the debt that is borrowed. If there is a high risk involved due to less return on the debt that is acquired, this will question the lenders. Another important factor to consider is that the lending institutions earn a high rate of interest on the debt that is provided, So they won’t mind the country in question not paying back their debt, as the lending country can earn high interest from the debts they have provided.

From a traders’ point of view, it is better to have an overall view on what the country’s debt to GDP ratio is and to forecast if the specific country is likely to repay their debts or default on payments. If this fundamental analysis indicator factor is ignored when doing your due diligence for long term trades, then there is a high probability of the specific currency to depreciate in the long run, if that country defaults on its debt.

 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, December 23 – Top Trade Setups In Forex – U.S. Durable Goods Ahead! 

On the forex front, the U.S. Dollar Index rose 0.3% to 97.68. The euro slipped 0.4% to $1.1079. The German GfK Consumer Confidence Index slipped to 9.6 for January (9.8 expected) from 9.7 in December.

On the forex front, the U.S. Dollar Index rose 0.3% to 97.68. The euro slipped 0.4% to $1.1079. The German GfK Consumer Confidence Index slipped to 9.6 for January (9.8 expected) from 9.7 in December.

On the forex front, the U.S. Dollar Index rose 0.3% to 97.68. The euro slipped 0.4% to $1.1079. The German GfK Consumer Confidence Index slipped to 9.6 for January (9.8 expected) from 9.7 in December.

The British pound was little changed at $1.3004. U.K. House of Commons voted 358 to 234 in support of Prime Minister Boris Johnson’s Brexit deal. 

Regarding U.S. economic data, third-quarter GDP growth was confirmed at an annualized rate of 2.1% on the quarter (as expected). Meanwhile, personal income rose 0.5% on month in November (+0.3% expected) and personal spending grew 0.4% (as expected). Later today, economists expect durable goods orders to rise 1.5% on month in November, while new home sales are anticipated to fall to 730,000 units.

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing red and dropped to 1.1080 and failed to extend Friday’s declines from 100- Day Moving Average. As of writing, the EUR/USD currency pair is currently trading at 1.1078 and consolidates in the range between the 1.1073 – 1.1083.

At the yearly front, the EUR/USD currency pair has lost a significant part of the gains during the January 2017 – February 2018 period and trading bearish while ending 2019. As of now, the pair is trading near the 1.1082, representing a 3.17% decline on a year-to-date basis. Notably, the pair dropped by 14.14% during 2018.

The greenback strength held ground against the EUR currency over intensifying trade tensions, which pushed Germany to the recession. Besides this, the European Central Bank further delivered the rate cut into the negative territory during September and declared a fresh bond-buying program.

The market is expecting that the EUR/USD currency pair may pick up the strong bullish buying in 2020. Whereas, the continued gains could remain difficult if the Eurozone economic data do not show any substantial progress.

    


Daily Support and Resistance

  • S3 1.0974
  • S2 1.1031
  • S1 1.1053

Pivot Point 1.1089

  • R1 1.1111
  • R2 1.1146
  • R3    1.1203

EUR/USD– Trading Tips

The EUR/USD is trading with the slightly bearish sentiment, and it’s very likely to test the next support area around 1.1110 on the 4-hour chart. The bearish breakout of this level can trigger further selling until 1.1085. Conversely, the bullish bias can lead the EUR/USD to 1.1125 and 1.1160 resistance levels. Let’s wait for the sell trade below 1.1110 today. 

 

GBP/USD– Daily Analysis

The GBP/USD currency pair failed to extend its bearish weekly streak despite the United Kingdom’s political uncertainty. As of writing, the GBP/USD currency pair is currently trading at 1.3013 and consolidates in the bearish range between the 1.2990 – 1.3017. Moreover, the cables traders seem to avoid declining political optimism in the United Kingdom.

The British pound was little changed at $1.3004. U.K. House of Commons voted 358 to 234 for Prime Minister Boris Johnson’s Brexit deal.

The United Kingdom Prime Minister Boris Johnson succeeded in getting his European Union Withdrawal agreement bill passed from the new Parliament. Whereas, the House of Common has not passed the bill so far, but will have lesser stops considering the Tories majority.

The U.S. Commerce Department will release November durable goods orders (+1.5% on month expected) and new home sales (730,000 units expected). The Federal Reserve Bank of Chicago will post November National Activity Index (-0.31 expected).


Daily Support and Resistance

  • S3 1.2757
  • S2 1.2901
  • S1 1.2955

Pivot Point 1.3044

  • R1 1.3099
  • R2 1.3188
  • R3 1.3331

GBP/USD– Trading Tip

The GBP/USD has broken the support mark of 1.3060, and currently, this level is expected to serve as a resistance for the GBP/USD. On the downside, the GBP/USD can exhibit further selling until the next target level of 1.2940.

The RSI and MACD have now crossed over 50 and 0 zone, suggesting odds of a bullish reversal in the GBP/USD pair. Consider staying bullish above 1.2995 and bearish below 1.3100 today. 

USD/JPY – Daily Analysis

The USD/JPY was broadly flat at 109.44. The USD/JPY currency pair flashing green and picked up the bids to 109.50, mainly due to the United States President Donald Trump Weeknd’s positive comments. The pair also got support from the United States upbeat data, which turned the market risk-on. 

On the Weekend holidays, the United States President Donald Trump said: “We have just achieved progress on the trade deal, and we will be signing it very soon. The same motivates the risk-takers to start the holiday-shortened week on a positive side.

It is worth to mention that the Fridays strong United States GDP hit down the talks of the slowdown. Moreover, the reason behind the greenback strength was the upbeat data from the U.S., including Personal Consumption Expenditure and the Michigan Consumer Sentiment Index.

Looking forward, the market traders will take note of the November month U.S. Durable Goods Orders, up for publishing on Monday, to verify the fresh, positive data from the U.S. The report of Durable Goods Orders is anticipated to increase by 1.9% from downwardly revised 0.5% previous.

Besides this, the November month Chicago Fed National Activity Index, as well as New Home Sales, will also entertain traders before spreading the holiday mood. Whereas the activity gauge is anticipated to recover to -0.09 against -0.71 earlier, the housing data could soften to 0.728M against 0.733M prior.


Daily Support and Resistance

  • S3 108.56
  • S2 108.97
  • S1 109.17

Pivot Point 109.38

  • R1 109.58
  • R2 109.8
  • R3 110.21

USD/JPY – Trading Tips

The USD/JPY has already completed the 38.2% Fibonacci retracement around 109.200 level. Now, this level is supporting the safe-haven pair along with an immediate resistance around 109.350. 

The RSI and MACD are suggesting chances of further selling in the USD/JPY pair. The pair may trade bearish below 109.50 to target 109.200 and even below to 108.950 today. 

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 20 – Top Trade Setups In Forex – GDP Figures in Highlights! 

On the forex front, the British pound slid 0.5% to a two-week low of $1.3017, posting a three-day decline. Official data showed that U.K. retail sales dropped 0.6% on month in November (+0.2% estimated), falling for a fourth straight month–the worst run since 1996. On the other hand, the Bank of England held its benchmark rate at 0.75% unchanged as expected.

On the forex front, the British pound slid 0.5% to a two-week low of $1.3017, posting a three-day decline. Official data showed that U.K. retail sales dropped 0.6% on month in November (+0.2% estimated), falling for a fourth straight month–the worst run since 1996. On the other hand, the Bank of England held its benchmark rate at 0.75% unchanged as expected.

On the forex front, the British pound slid 0.5% to a two-week low of $1.3017, posting a three-day decline. Official data showed that U.K. retail sales dropped 0.6% on month in November (+0.2% estimated), falling for a fourth straight month–the worst run since 1996. On the other hand, the Bank of England held its benchmark rate at 0.75% unchanged as expected.

The European Commission will release the eurozone’s December Consumer Confidence Index (-7.0 expected). In Germany, the GfK Consumer Confidence Index for January will be published (9.8 expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

EUR/USD – Daily Analysis

The EUR/USD pair exhibit bearish bias to hit the low level of 1.1117 from the Tuesday high of 1.1175 ahead of United States data release. At the moment, the EUR/USD pair is currently trading at 1.1116 and consolidates in the range between the 1.1114 – 1.1126. The pair has dropped but still staying inside the one-week-old symmetrical triangle.

The EUR/USD currency pair’s weekly candle now has a long upper shadow, which is a significant clue of bulls losing steam above the resistance of the trendline dropping from September 2018 and June 2019 highs.

The currency pairs trendline resistance is currently seen at 1.1148. The pair had increased to a high of 1.1175 previously but dropped again below 1.1148 on the next day. As a result, the consecutive failure of buyers to beat the convincing break above the trendlines has supported the negative risks, which may increase if the United States data ignore past expectations. The data is scheduled to release today.

If the personal spending and Core PCE release unexpectedly come out better, they will validate the Federal Reserve’s recent decision to pause the rate cuts and push the greenback higher.

On the other hand, a big miss may fuel the greenback sell-off. Looking forward, the EUR/USD currency pair will turn bullish mainly if the pair beats the weekly close above the trendline hurdle at 1.1148.

    

Daily Support and Resistance

  • S3 1.1108
  • S2 1.1112
  • S1 1.1114

Pivot Point 1.1116

  • R1 1.1118
  • R2 1.112
  • R3 1.1124

EUR/USD– Trading Tips

On Friday, the EUR/USD continues to trade mostly sideways, while investors await the U.S. GDP figures. The EUR/USD is trading with slightly bearish sentiment, and it’s very likely to test the next support area around 1.1110 on the 4-hour chart. 

The bearish breakout of this level can trigger further selling until 1.1085. Conversely, the bullish bias can lead the EUR/USD to 1.1125 and 1.1160 resistance levels. Let’s wait for the sell trade below 1.1110 today. 

 

GBP/USD– Daily Analysis

The GBP/USD currency pair hit the bullish track and recovered to 1.3020, mainly due to optimism surrounding the Brexit due to the voting on the United Kingdom Prime Minister Boris Johnson’s WAB. As of writing, the GBP/USD currency pair is currently trading at 1.3022. The GBP/USD traders seem confident ahead of the House of Commons voting on the UK PM’s Brexit bill.

The European Union Withdrawal Agreement Bill (WAB) will allow the United Kingdom to leave the European Union on January 31 while it’s also arranging the stage for no transition period beyond December 2020. The bill will also allow more British judges to leave from the previous rulings of the European Union’s top court.

The U.K. Office for National Statistics will release final readings of third-quarter GDP (+1.0% on-year expected), current account (15.5 billion pounds deficit expected), and November public sector net borrowing excluding banking groups (6.1 billion pounds expected).

The voting result will be released at 15:00 GMT on Friday. Traders will likely watch the final figures of the United Kingdoms’ 3rd-quarter Gross Domestic Product (GDP) for new directions. According to the forecast, there will no change in the GDP figures on QoQ and YoY basis that are 0.3% and 1.0%, respectively.

Daily Support and Resistance

 

  • S3 1.2757
  • S2 1.29
  • S1 1.2955

Pivot Point 1.3044

  • R1 1.3098
  • R2 1.3188
  • R3 1.3331

GBP/USD– Trading Tip

The GBP/USD has broken the support mark of 1.3060, and currently, this level is expected to serve as a resistance for the GBP/USD. On the downside, the GBP/USD can exhibit further selling until the next target level of 1.2940.

The RSI and MACD have now crossed over 50 and 0 zone, suggesting odds of a bullish reversal in the GBP/USD pair. Consider staying bullish above 1.2995 and bearish below 1.3100 today. 

USD/JPY – Daily Analysis

The USD/JPY closed at 109.366 after placing a high of 109.685 and a low of 109.180. Overall the trend for USD/JPY on Thursday remained bearish after the Bank of Japan kept its rates unchanged on Thursday at minus -0.1% the pair USD/JPY dipped in the financial market. 

The BOJ voted 7 to 2 to keep its short-term interest rates at -0.1% and the long-term rates at 0%. According to the Central Bank of Japan, the economy was likely to continue on a moderate expanding trend. The impact of the global economic slowdown on domestic demand was expected to be limited in the future. Although the fears of global economic slowdown still prevail in the market.

Recently, the government of Japan implemented a $122B fiscal stimulus package to aid economic growth. Japanese debt levels highly criticized this idea, but it was a wise decision as the government implemented a consumer tax hike after that.

The global economic outlook was raised after the phase-one deal between the U.S. & China and the victory of Johnson in Britain elections. Bank of Japan revised its GDP forecast for next year to 1.4% from the previous prediction of 1.2%.

The positive gestures and statements in Bank of Japan’s monetary policy statement on Thursday weighed on USD/JPY prices.

Adding in the downward trend of pair USD/JPY was the U.S. economic data that day. At 18:30 GMT, the Current Account Balance for the 3rd Quarter of the U.S. declined to -124B from -122B expectations. The Unemployment claims from last week surged to 234K from expected 225K. The C.B. Leading Index also fell to 0.0%, and the Existing Home Sales dropped to 5.35M from 5.44M of expectations.

On the other hand, the U.S. House of Representatives voted in favor of passing the impeachment of Donald Trump and made him third U.S. president to be impeached. However, the U.S. Senate of Republicans is still to vote on this, and it is expected that they will not vote against Trump.

Daily Support and Resistance    

  • S3 108.56
  • S2 108.97
  • S1 109.17

Pivot Point 109.38

  • R1 109.58
  • R2 109.79
  • R3 110.21

USD/JPY – Trading Tips

The USD/JPY has already completed the 38.2% Fibonacci retracement around 109.200 level. Now, this level is supporting the safe-haven pair along with an immediate resistance around 109.350. 

The RSI and MACD are suggesting chances of further selling in the USD/JPY pair. The pair may trade bearish below 109.50 to target 109.200 and even below to 108.950 today. 

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 19 – Top Trade Setups In Forex – Brace for BOE Interest Rate

The U.S. Dollar Index was up for a second day, rising 0.2% to 97.40. The British pound lost 0.3% to $1.3085. Official data showed that U.K. core CPI grew 1.7% on year in November (as expected). On the other hand, the Bank of England is expected to keep its benchmark rate at 0.75% unchanged later today. Also, November retail sales will be reported (+0.2% on month estimated).

The U.S. Dollar Index was up for a second day, rising 0.2% to 97.40. The British pound lost 0.3% to $1.3085. Official data showed that U.K. core CPI grew 1.7% on year in November (as expected). On the other hand, the Bank of England is expected to keep its benchmark rate at 0.75% unchanged later today. Also, November retail sales will be reported (+0.2% on month estimated).

The U.S. Dollar Index was up for a second day, rising 0.2% to 97.40. The British pound lost 0.3% to $1.3085. Official data showed that U.K. core CPI grew 1.7% on year in November (as expected). On the other hand, the Bank of England is expected to keep its benchmark rate at 0.75% unchanged later today. Also, November retail sales will be reported (+0.2% on month estimated).

The euro dropped 0.3% to $1.1115. The German Ifo Business Climate Index climbed to 96.3 in December (95.5 expected) from 95.1 in November.

Later today, the U.S. Labor Department will report initial jobless claims for the week ending December 14 (225,000 expected, 252,000 in the prior week). Existing home sales are expected to slightly decrease to an annualized rate of 5.44 million units in November (5.46 million units in October).

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing green and hit the bullish track from the average support and picked up some buying mainly due to greenback weakness. Although, the currency pair did not beat the 200-day Moving Average so far. As of writing, the EUR/USD currency pair is currently trading at 1.1126 and representing 0.14% gains. By the way, the pair is now consolidating in the range between the 1.1113 – 1.1133.

President Donald Trump was accused by the U.S. House of Representatives on Wednesday night for the abuse of power. The House also approved a 2nd-charge that Trump obstructed a Congress investigation. The greenback came under pressure after the impeachment news hit the wires. 

It should be noted that the declines in the greenback were modest and will likely be reversed during Europe as the Senate, which is controlled by Trump’s Republican Party, possibly absolve to him of all charges. Moreover, the chances of Donald Trump vacating office are low. Looking forward, the Senate trial will likely start in January. 

With the German economy showing indications of bottoming out and heading into New Year with more confidence, there seem fewer chances that EUR traders will pick up the selling trend.

From a technical perspective, the currency pair is currently trading in no man’s land. A close above the 200-day average at 1.1151 is needed to revive the short-term bullish setup. On the flip side, a break below Wednesday’s low of 1.1115 would imply a short-term bearish reversal. 


Daily Support and Resistance

  • S3 1.1117
  • S2 1.1121
  • S1 1.1124

Pivot Point 1.1126

  • R1 1.1128
  • R2 1.113
  • R3 1.1134

EUR/USD– Trading Tips

Technically, the EUR/USD traded mostly sideways ahead of CPI, and German Business Climate figures. The EUR/USD is trading with a slightly bearish bias, and it’s very likely to test the bullish trendline on the 4-hour chart. The bullish trendline is expected to support the EUR/USD above 1.1125. Continuation of a bullish bias over 1.1125 can hold EUR/USD bullish unto 1.1160 and 1.1185. The EUR/USD’s next support lingers around 1.1095 today,

 

GBP/USD– Daily Analysis

The GBP/USD currency pair still found under pressure and hit the weekly lows despite the greenback weakness and waiting for fresh clues from the United Kingdom data/events which are scheduled to be released. As of writing, the GBP/USD currency pair is currently trading at 1.3081 and consolidates in the range between 1.3072 – 1.3091.

At the USD front, the greenback showed a broad-based weakness mainly due to the House Representatives, which voted to impeach President Trump. The House also approved a 2nd-charge that Trump obstructed a Congress investigation. Moreover, the ball will meet the Senate someday during early January for the opposition Democrats to make Donald Trump as the 3rd in the history to get impeached.

The GBP currency traders will keep their eyes on the November month Retail Sales ahead of the monetary policy meeting of the Bank of England and the British Queens speech setting out the Conservative government’s agenda for the coming year. The trader will also carefully observe the U.S. Philadelphia Fed Manufacturing Survey, Existing Home Sales, and Weekly Jobless Claims.

For now, BOE is likely to keep the rate unchanged at 0.75%. However, the markets are pricing a 65% probability of a rate cut by May 2020. 

Daily Support and Resistance

  • S3 1.295
  • S2 1.3019
  • S1 1.3049

Pivot Point 1.3089

  • R1 1.3118
  • R2 1.3159
  • R3 1.3229

GBP/USD– Trading Tip

The GBP/USD is trading with a slightly bullish bias now above 1.3178 as the pair has violated the 61.8% Fibonacci retracement level of 1.3240. Below the same mark, the 50 periods EMA is likely to provide resistance to the GBP/USD. 

The RSI and MACD are holding in the oversold zone, suggesting odds of a bullish reversal upon completion above the double bottom support level of 1.3095. Today, consider taking buying trades above 1.3100 and bearish trades below 1.3178. 

USD/JPY – Daily Analysis

The USD/JPY currency pair dropped from the weekly high after the United States House of Representatives voted to impeach President Donald Trump. As of writing, the USD/JPY currency pair s currently trading at 109.60 even after the status quo BOJ and remains stuck in the same range between the 109.56 – 109.59.

The Bank of Japan (BOJ) maintained the short-term interest rate at -0.1 and kept the 10-year yield target unchanged around 0%, as expected. The risk-off sentiment is expected to remain ahead. The United States’ ten-year treasury yields fell to 1.90%, whereas the S&P 500 Futures also decreases.

Looking forward, traders will keep their eyes on the monetary policy decision by the Bank of Japan (BOJ). Ahead of the releases, analysts at T.D. Securities said, “The Bank Of Japan will continue its last meeting of the year. This should move with little fanfare because the BOJ has made the necessary changes in October.

    


Daily Support and Resistance

  • S3 109.07
  • S2 109.3
  • S1 109.43

Pivot Point 109.53

  • R1 109.66
  • R2 109.76
  • R3 109.99

USD/JPY – Trading Tips

From the technical perspective, a breakout, if confirmed, would imply a resumption of the rally from the December low of 108.46 and may yield a rally to 110.00. On the flip side, range breakdown will likely allow a re-test of support at 109.20-109.00. 

On the technical side, the USD/JPY consolidates below 109.700 resistance level.

The 38.2% Fibonacci retracement level is supporting the USD/JPY pair around 109.200 level. While the RSI and MACD are suggesting chances of further selling in the USD/JPY pair. The pair may trade bearish below 109.53 to target 109.200 today. 

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 18 – Top Trade Setups In Forex – Eyes On UK CPI!

On the forex front, the British pound plunged 1.6% to $1.3122, wiping out its gains since the election day last Thursday. Media reported that U.K. Prime Minister Boris Johnson might amend the withdrawal agreement bill to block any further extension of Brexit. Hence the prospect of a no-deal Brexit is still on the table.

On the forex front, the British pound plunged 1.6% to $1.3122, wiping out its gains since the election day last Thursday. Media reported that U.K. Prime Minister Boris Johnson might amend the withdrawal agreement bill to block any further extension of Brexit. Hence the prospect of a no-deal Brexit is still on the table.

On the forex front, the British pound plunged 1.6% to $1.3122, wiping out its gains since the election day last Thursday. Media reported that U.K. Prime Minister Boris Johnson might amend the withdrawal agreement bill to block any further extension of Brexit. Hence the prospect of a no-deal Brexit is still on the table.

Also, the U.K.’s official data showed that the jobless rate for the three months to October was steady at 3.8% (3.9% expected). Later today, investors will focus on U.K. consumer inflation data for November (CPI +1.4% on year expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

EUR/USD – Daily Analysis

The EUR/USD currency pair remains in the red territory and hits the strong bearish track after got repeated rejection to cross the 200-day Moving Average resistance. As of writing, the currency pair is currently trading at 1.1133, representing a 0.14% declines on the day and consolidates in the range between 1.1131 – 1.1155.

The EUR/USD pair hit the high level of 1.1155 but failed to beat the 200-day Moving Average resistance. Looking forward, the currency pair will likely pick up further selling trend if the German data disappoints expectations, whereas if the German data beats expectations figures, the currency pair can beat the 200-day Moving average.

It should also be noted that the buyers failed to secure a daily close above the long-term average for the 4th-straight day on Tuesday because the range between the United States and German ten-year bond yields increased nearly 5-basis points to 218 basis points.

Looking ahead, the German IFO survey, scheduled to release at 09:00 GMT, is expected to show the expectations index increased to 93.0 in December from 92.1, according to the latest survey of analysts. 

As we recently mentioned that an above-forecast figure is needed to confirm last week’s ZEW survey, which showed the German economy has bottomed out and draws bids for the EUR currency. Moreover, an upbeat on expectations will likely yield a move above the 200-day MA at 1.1151.

The European Central Bank’s President, Lagarde, is scheduled to speak at 08:30 GMT. Lagarde is unlikely to sound dovish and will likely repeat the need for fiscal stimulus. 

Daily Support and Resistance

  • S3 1.1062
  • S2 1.1107
  • S1 1.113

Pivot Point 1.1153

  • R1 1.1176
  • R2 1.1198
  • R3 1.1243

EUR/USD– Trading Tips

Technically, the EUR/USD traded mostly sideways ahead of CPI, and German Business Climate figures. The EUR/USD is trading with a slightly bearish bias, and it’s very likely to test the bullish trendline on the 4-hour chart. The bullish trendline is likely to support the EUR/USD above 1.1125. Continuation of a bullish bias over 1.1125 can hold EUR/USD bullish unto 1.1160 and 1.1185. The EUR/USD’s next support lingers around 1.1095 today,

 

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing red and hit the four-day lows of 1.309 down -0.30% on the day. The currency pair continues its bearish streak and still under pressure. That is mainly due to hard Brexit fears intensified after UK PM Johnson’s confirmed to the parliament that his office planned to ensure by law that the U.K.’s post-Brexit departure period will end in Dec 2020. 

As of writing, the GBP/USD currency pair is currently trading 1.3102 and consolidates in the range between the 1.3072 – 1.3135.

It should be noted that the departure uncertainty regarding Brexit was always considered as the risk faced by the GBP currency, but it was priced in sooner than anticipated. As a result, the soft Brexit premium is currently being priced out of GBP, and buyers have been sent back from the buying track.

At the greenback front, the U.S. Dollar (USD) benefited from the upbeat industrial production and housing market numbers along with the welcome comments from the Federal Reserve (Fed) officials. The greenback also got the support of trade-related positive statements from the Treasury Secretary Steve Mnuchin and Trade Representative Robert Lighthizer.

Looking forward, the GBP buyers will closely observe the November month inflation data, whereas the Fed speak will likely offer additional hints. In this regard, T.D. Securities said, “We look for CPI to edge a touch lower to 1.4% y/y in November (market 1.5%). Underlying this, we expect core CPI to hold unchanged at 1.7% y/y (market 1.6%) for the 3rd-month in a row. 


Daily Support and Resistance 

  • S3 1.2774
  • S2 1.2976
  • S1 1.3054

Pivot Point 1.3178

  • R1 1.3256
  • R2 1.338
  • R3 1.3581

GBP/USD– Trading Tip

The GBP/USD is trading bearish below 1.3178 as the pair has violated the 61.8% Fibonacci retracement level of 1.3240. Below the same mark, the 50 periods EMA is likely to provide resistance to the GBP/USD. 

The RSI and MACD are holding in the oversold zone, suggesting odds of a bullish reversal upon completion above the double bottom support level of 1.3095. Today, consider taking buying trades above 1.3100 and bearish trades below 1.3178. 

USD/JPY – Daily Analysis

The USD/JPY closed at 109.472 after placing a high of 109.632 and a low of 109.441. Overall the trend for USD/JPY pair remained bearish that day.

On the data side, at 2:00 GMT, the U.S. Department of the Treasury published the TIC Long-Term Purchases for October, and it showed a decline to 32.5B from expected 52.2B and weighed on U.S. dollar.

The Building Permits from the United States showed growth in November when released at 18:30 GMT. In the previous month, it was expected that 1.41M building permits would be issued. Still, according to the reports, the number of actual building permits in November exceeded the expectations and came in as 1.48M to support the U.S. dollar.

The number of U.S. residential buildings that began construction during November also exceeded the expectations and supported the U.S. dollar on Tuesday. It was expected that 1.34M house buildings would start its construction, but in actual 1.37M, housing starts.

At 19:15 GMT, the Capacity Utilization Rate from Federal Reserve was published, which showed that 77.3% of available resources were being utilized during November. The expected figure was almost the same 77.4% and did not affect the U.S. dollar. However, Industrial Production from the United States for November also increased to 1.1% from expected 0.8% and supported the U.S. dollar.

At 20:00 GMT, the JOLTS Job Openings for October showed growth to 7.27M from the expected 7.01M and supported the U.S. dollar. And at 20:01 GMT, the IBD/TIPP Economic Optimism for the month of December was surged to 57.0 from forecasted 54.2 and supported U.S. dollar on Tuesday.

Daily Support and Resistance

  • S3 109.14
  • S2 109.34
  • S1 109.42

Pivot Point 109.53

  • R1 109.62
  • R2 109.72
  • R3 109.92

USD/JPY – Trading Tips

On the technical side, the USD/JPY consolidates below 109.700 resistance level. The same level marks a triple top pattern has the USD/JPY faced a hard time violating it back on Dec 1, 13, and 16. 

The 38.2% Fibonacci retracement level is supporting the USD/JPY pair around 109.200 level. While the RSI and MACD are suggesting chances of further selling in the USD/JPY pair. The pair may trade bearish below 109.53 to target 109.200 today. 

All the best!

Categories
Forex Economic Indicators Forex Fundamental Analysis

Forex Fundamental Indicator – What you need to know about the GDP & GDP Growth

There are several components that make up fundamental analysis, but one of the most influential indicators is The Gross Domestic Product and the GDP growth rate. GDP is a well-known metric of economics and is one of the most important components when doing your fundamental analysis due diligence of a currency pair.

There are several components that make up fundamental analysis, but one of the most influential indicators is The Gross Domestic Product and the GDP growth rate. GDP is a well-known metric of economics and is one of the most important components when doing your fundamental analysis due diligence of a currency pair.

There are several components that make up fundamental analysis, but one of the most influential indicators is The Gross Domestic Product and the GDP growth rate. GDP is a well-known metric of economics and is one of the most important components when doing your fundamental analysis due diligence of a currency pair.

What is GDP

The Gross Domestic Product is defined as a “monetary measure of the market value of all the final goods and services produced in a specific time period, often annually”- Wikipedia

This is the total economic activity generated by both private and public companies within a country in a specific time period.

Nominal GDP vs. Real GDP

Nominal GDP is the market value of all goods and services produced in an economy with inflation adjustments. Real GDP is the Nominal GDP, which has been adjusted for inflation.

Components of the GDP

The GDP is broken down into four components and is an indication of what a country is good at producing: Personal consumption expenditures of goods and services, business investments, government expending, and net exports of goods and services.

Personal Consumption expenditures

Consumer spending is one of the main contributors to production and is the best way to compare using data from different years. This is subdivided by the BEA into goods and services.

Goods are further subdivided into durable and non-durable goods. Durable goods are cars and furniture, for example, and have a lifespan of three or more years. Non-durable goods are fuel, clothing, food, etc.

Services include commodities that cannot be stored are consumed when purchased.

Business investments

This includes purchases that companies make to produce consumer goods, and not every purchase is counted as purchases must go to creating new consumer products. Again the BEA divides this component into two subcomponents;

Fixed Investment – It is a non-residential investment that consists of business equipment like software, capital goods, and manufacturing equipment, and this also includes commercial real estate construction and residential construction. This component is based on monthly shipment data from the BEA durable goods order report.

Change in private inventory – this is how many companies will add to their inventories of goods they plan to sell. As orders increase, companies may not have enough goods in stock and therefore order more to ensure supply and the increase in private inventories contributes to GDP. If there is a decrease in inventory orders, then companies will halt manufacturing, and if it persists, then staff reductions are next.

Government spending

This is an indication of the size of government across countries. There is a large variation in this indicator and highlights the countries’ approach to delivering public goods and services.

Net exports of goods and services

Imports and exports have an opposite effect on GDP as exports add to the GDP and imports subtract from the GDP data.

 

The economic reports

The economic reports of the GDP cover quarter or annual data periods, and this data is reviewed periodically until the final GDP data is released. There are some countries that release this data on a monthly basis, like the USA. However, the majority opt to release this data quarterly and annually.

Analyzing the DATA

The economic reports of the Gross Domestic Product are such an integral measure of economic activity that it is a vital component of fundamental analysis in a currency pair. The GDP data is a key measure in determining the strength of a country’s economy and hence the strength of its currency. By comparing the two sets of data on both currencies and comparing each set of GDP data to that of previous releases. This comparison helps to determine which of the two currencies is stronger, and enjoying a strong economy.

When analyzing this data, it is necessary to compare like for like economies as each country is at a different level of development. When we look at developing economies, we can anticipate seeing annual growth rates that exceed the norm, and for the emerging economies, annual growth rates can climb to double digits.

What is the GDP Growth Rate

The GDP growth rate measures how fast an economy is growing and is the next comparison, which is necessary in order to evaluate the previous years’ data is in line with the previous years for the same period. This collection of data shows the expansion or contraction of economic activity within a country.

What determines growth

A nation’s GDP growth rate determines its economic health. If the growth rate is positive, it indicates that the wealth of the nation is improving, and the economy is doing well. If the GDP growth rate is negative, meaning it has fallen below the previous period, it is a clear indication that the economy is declining. This decline in the GDP growth rate has serious ramifications as unemployment rises with the downturn of production.

Economic reports

The GDP economic reports are a vital measure of economic activity and integral to the fundamental analysis for any currency pair you wish to trade. This data is vital in determining the benefits of a particular economy and the strength of its currency. By comparing this data to previous years or periods, one is able to ascertain the progression of the expansion or contraction of the economic activity and thus evaluate if it is equivalent to the same period of previous years.

Impact on currency

The GDP growth rates are a massive driving factor in a currency’s performance because of the results that economic activity has on a currency. This means that higher levels of economic activity will generate a higher demand for a specific currency, and an increase in economic activity will also generate an increase in the total value of that economy.  The more value that a specific country’s economy has, the higher the value of its currency. What traders are looking at when analyzing this data is the difference found between the two currencies’ growth rates. As a rule of thumb, the currency which has a higher growth rate will generally experience an appreciation of its currency.

 

Sources of information on GDP

Most nations release their GDP data on a monthly, quarterly, and annual basis, and in the U.S., it is the Bureau of Economic Analysis (BEA) that publishes an advanced release of this data.

When one is contemplating doing their own fundamental analysis, it is imperative to take into account the effect that a country’s GDP will have on its currency strength and the importance of measuring the data rate from previous periods. The GDP data is closely monitored as it defines the movements of an economy is a straightforward way.

Links to GDP information resources:

IMF

https://www.imf.org/external/pubs/ft/weo/2019/02/weodata/index.aspx

OECD

https://data.oecd.org/gdp/gross-domestic-product-gdp.htm

USA

https://www.bea.gov/data/gdp/gross-domestic-product

Europe

https://ec.europa.eu/eurostat/statistics-explained/index.php/Main_Page

UK

https://www.ons.gov.uk/economy/grossdomesticproductgdp

Canada

https://www150.statcan.gc.ca/n1/daily-quotidien/190531/dq190531a-eng.htm

Japan

https://fred.stlouisfed.org/release/tables?rid=269&eid=155790#snid=155791

China

http://www.stats.gov.cn/english/statisticaldata/Quarterlydata/

Australia

https://www.abs.gov.au/ausstats/[email protected]/mf/5206.0

New Zealan­­­­d

https://www.stats.govt.nz/indicators/gross-domestic-product-gdp

 

Categories
Forex Market Analysis

Daily FX. Analysis, December 17 – Top Trade Setups In Forex – Eyes on UK Labor Market Figures! 

On Tuesday, the market trades with a risk-off sentiment as investors are still waiting for clarity about Brexit and Trade deal between the U.S. and China. The U.S. dollar was steady against other major currencies, with the ICE Dollar Index closing flat on the day at 97.15.

On Tuesday, the market trades with a risk-off sentiment as investors are still waiting for clarity about Brexit and Trade deal between the U.S. and China. The U.S. dollar was steady against other major currencies, with the ICE Dollar Index closing flat on the day at 97.15.

On Tuesday, the market trades with a risk-off sentiment as investors are still waiting for clarity about Brexit and Trade deal between the U.S. and China. The U.S. dollar was steady against other major currencies, with the ICE Dollar Index closing flat on the day at 97.15.

China’s official data showed that industrial production rose 6.2% on year in November (+5.0% expected), and retail sales grew 8.0% (+7.6% expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

Economic Calendar by TradingView

 

EUR/USD – Daily Analysis

Today in the early Asian session, the EUR/USD currency pair flashing green and trading on the bullish track but failed to cross the 200-day moving average despite the fresh trade truce between the United States and China. The EUR/USD is presently trading at 1.1147, having faced rejection at the 200-day Moving Average at 1.1152. 

However, the EUR currency has repeatedly failed to close above the 200-day MA. For example, the Euro currency picked up a strong buying on Friday and climbed to a high of 1.12 only to end the day with moderate losses at 1.1118. 

Regarding U.S. economic data, the Empire Manufacturing Index posted 3.5 for December (below the 4.0 expected, up from 2.9 in November). The Markit U.S. Manufacturing Purchasing Managers Index (preliminary reading) declined slightly to 52.5 in December (below 52.6 expected) from 52.6 in November.

The monthly United States Housing Starts and Building Permits are scheduled for release at 13:30 GMT on Tuesday. The Eurozone Trade Balance (Oct), scheduled for release at 10:00 GMT, is unlikely to move markets. 

Daily Support and Resistance

  • S3 1.1079
  • S2 1.1111
  • S1 1.1127

Pivot Point 1.1143

  • R1 1.1159
  • R2 1.1175
  • R3 1.1207

EUR/USD– Trading Tips

Just like the rest of the forex pairs, the EUR/USD hasn’t made much progress on Monday despite a mixture of PMI data. The EUR/USD is trading with a slightly bullish above the bullish trendline, which is supporting the EUR/USD above 1.1125. Extension of a bullish bias above 1.1125 can keep EUR/USD optimistic until 1.1160 and 1.1185. The EUR/USD’s next support prevails around 1.1095 today,

 

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing red and representing more than 60 pips decline to 1.3265, having hit the low of 1.3236 during the Asian trading hours. The bearish bias came mainly due to hard Brexit fears. As of writing, the GBP/USD currency pair is currently trading at 1.3295 and consolidates in the range between the 1.3236 – 1.3339. Looking ahead, the GBP/USD pair could come under pressure due to fresh Brexit concerns.

It should be noted that the victory of conservatives will help the United Kingdom Prime Minister Boris Johnson to pass the Bill to rule out European Union transition beyond 2020. The Departure Agreement Bill (WAB) is widely expected to be put for a 2nd reading in the House of Commons on this Friday.

Whereas, the Conservatives leader Boris Jonhson will not hesitate to repeat his promise regarding leave the region with deal or without a deal before 2020 ends. Despite that, the United Kingdom Prime Minster has repeatedly promoted the idea of the Canda-style free trade agreement, and UK PM will likely push for the same after the Bill gets the Parliaments’ approval.

Comments came from Robert Peterson that the PM Boris Johnson is committed to passing the Tory manifesto commitment to end the transition in just over a year from now. 

Looking forward, investors will seek more hints of the recent declines in the GBP from the political headlines. However, the traders will keep their eyes on the releases of the UK employment figures. A busy week of the UK calendar is worth watching ahead of the Bank of England policy meeting on Thursday. The consensus is for the unemployment rate to tick up to 3.9%, whereas wages growth eases a little to 3.4% YoY,” says Westpac ahead of the data release.

Daily Support and Resistance 

  • R3: 1.3722
  • R2: 1.3548
  • R1: 1.3441

Pivot Point 1.3374

  • S1: 1.3267
  • S2: 1.32
  • S3: 1.3025

GBP/USD– Trading Tip

The GBP/USD is trading bearish below 1.3362 as the pair seems to go for a retracement until 1.3240, which marks a 61.8% Fibonacci level. At the same mark, the 50 periods EMA is likely to support the GBP/USD. 

The RSI and MACD are holding in the buying zone, suggesting odds of a bullish reversal upon completion of 61.8% Fibonacci retracement. Today, consider taking buying trades above 1.3190 and bearish trades below 1.3274. 

USD/JPY – Daily Analysis

The USD/JPY currency pair is struggling to extend its recovery rally because the markets want more clarity about the fresh optimism surrounding the phase-one trade deal and Brexit concerns. As of writing, the USD/JPY currency pair is currently trading at 109.56 and consolidates in the range between 109.50 – 109.63. 

Even after the fresh trade truce of the Sino-US Phase-one deal, the United States and China trade relationships are still being termed as noisy ceasefire by the South China morning post.

On the other hand, ITV’s Robert Peterson thinks the risk of hard Brexit because the United Kingdom’s (UK) Prime Minister (PM) will soon forward the Bill that supports no transition delay beyond 2020.

Moreover, the risk tone gets heavier because the United States’ ten-year treasury yields decline to 1.87%, whereas the S&P 500 Futures losses 0.14% to 3,193 by the press time.

Apart from the trade/Brexit headlines, monetary policy meetings by the Bank of Japan (BOJ) and headline inflation will also entertain momentum traders during this week. Whereas the BOJ is not expected to change the current monetary policy, appreciation of the latest fiscal measures will likely support the Japanese yen (JPY) to strengthen further on Thursday. Moreover, Friday’s inflation data will probably keep exerting downside pressure on the Japanese currency.

The currency pair ignored the sluggish activity data from the United States during the Monday as risk-on sentiment increased due to optimism surrounding the United States and China trade deal. Looking forward, today’s United States Industrial Production, Fed speak, and housing market data can offer immediate direction to the pair movement.

Daily Support and Resistance

  • S3 108.91
  • S2 109.22
  • S1 109.39

Pivot Point 109.53

  • R1 109.7
  • R2 109.84
  • R3 110.15

USD/JPY – Trading Tips

On the technical side, the buyers await a clear break of the monthly high surrounding 109.75 to target 110.00 and May month high near 110.70. Meanwhile, 21-day Exponential Moving Average (EMA) near 109.00 holds the key to fresh declines towards the 108.45/40 support area.

The pair is heading towards the double top resistance level of around 109.700. Below this, the USD/JPY is likely to show a bearish correction of up to 38.2% level, which stays at 109.200. On the higher side, the bullish breakout of USD/JPY can lead the Japanese pair towards 110.300. The MACD and RSI are in support of the bullish trend. 

All the best!

Categories
Forex Market Analysis

Daily FX. Analysis, December 16 – Top Trade Setups In Forex – Eurozone’s PMI Figure Drives! 

The US Dollar Index was broadly flat at 97.17. The euro slipped 0.1% to $1.1121. Later today, research firm Markit will post December eurozone Manufacturing PMI (47.3 expected) and Services PMI (52.0 expected). The USD/JPY edged up 0.1% to 109.38.

The US Dollar Index was broadly flat at 97.17. The euro slipped 0.1% to $1.1121. Later today, research firm Markit will post December eurozone Manufacturing PMI (47.3 expected) and Services PMI (52.0 expected). The USD/JPY edged up 0.1% to 109.38.

The US Dollar Index was broadly flat at 97.17. The euro slipped 0.1% to $1.1121. Later today, research firm Markit will post December eurozone Manufacturing PMI (47.3 expected) and Services PMI (52.0 expected). The USD/JPY edged up 0.1% to 109.38.

Regarding U.S. economic data, retail sales rose 0.2% on month in November (below the +0.5% expected, +0.4% in October). Import prices increased 0.2% on month (as expected, -0.5% in October).

Later today, the Empire Manufacturing Index for December (5.0 expected) and the Markit US Manufacturing Purchasing Managers’ Index (52.6 expected) will be reported.

Economic Events to Watch Today

Let’s took at these fundamentals.

AUD/USD – Daily Analysis

The AUD/USD currency pair seen unchanged and consolidates in the narrow trading range between the 0.6875 – 0.6878. The currency pair remains depressed despite the fresh optimism over the Sino-US trade deal. As of writing, the Aussie currency pair is currently trading at 0.6875.

The AUD/USD currency pair picked up a buying near 0.6775 following the consumer spending data, which represented a rise in retail sales by 8% year-on-year during November, crossing the forecasted growth of 7.6% by a big range.

Industrial production rose 6.2% compared to an expected rise of 5%, marking an improvement from October’s 4.7%. Moreover, the People’s Bank of China has injected 300 billion Yuan into the system via a one-year medium-term lending facility. 

The AUD/USD currency pair did not succeed to gain on its early positive move and saw a dramatic intraday turnaround on Friday. Moreover, the uncertainty regarding the US President Donald Trump’s decision to cancel the December 15 tariff-hike on Chinese imports weighed heavily on the China-proxy Australian dollar, causing a drop in AUD/USD pair around 75 pips from an intraday high level of 0.6938 the highest since July 26.

The bullish sentiment remains weak, possibly due to the reports that Beijing is planning to lower its 2020 gross domestic product target to 6% from the current year’s 6.5%. 

Looking forward, the worries of a deeper recession in China in 2020 will likely continue to overshadow the phase one US-China trade deal and send the AUD lower.

Daily Support and Resistance  

  • S3 0.6759
  • S2 0.6824
  • S1 0.685

Pivot Point 0.6889

  • R1 0.6915
  • R2 0.6954
  • R3 0.7019

AUD/USD– Trading Tips

The AUD/USD pair is hanging around 0.6900, trading mostly bullish despite staying in the overbought zone. The traded higher further above the 0.6865 mark, the 61.8% Fibo retracement level of its November slide. In the 4-hour chart, the 20 SMA has hastened north over the bigger ones, all of them under the current mark. In contrast, the technical indicators lead to the north in overbought territory, without indications of bullish exhaustion. The rally is set to remain on a break over 0.6930, the next resistance.

GBP/USD– Daily Analysis

The GBP/USD currency pair still found on the bullish track and remain supportive mainly due to the United Kingdom Prime Minister Boris Johnson win who promised to leave the European Union (EU) swiftly before January 31, 2020. 

The GBP/USD currency pair traded bullish at 1.3388 and representing sizeable gains of +0.50%, having hit the high of 1.3398. By the way, the pair consolidates in the range between 1.3337 – 1.3398.

Prime Minister Johnson will welcome 109 new Conservative lawmakers to parliament and will repeat his promise to increase funding to the state health service on the day.

Moreover, the GBP/USD currency pair is also supported by the increased expectations of an improvement in the UK’s manufacturing sector activity, as the Markit Preliminary Manufacturing PMI for December is seen arriving at 49.4 against. 48.9 previous. The country’s Services PMI is expected to reach at 49.6 against. 49.3 last.

At the greenback front, markets still unexcited despite the details of the US-China Phase One trade deal. The US dollar index now tests the 97 handles, retreating from Friday’s highs of 97.24.

The GBP currency buyers will keep up the buying because the UK looks to clear the Brexit departure Agreement in the parliament before Christmas. In contrast, the Bank of England (BOE) may signal a willingness to change course on the monetary policy, with the United Kingdom election out of the way.             

Daily Support and Resistance

  • S3 1.3025
  • S2 1.32
  • S1 1.3267

Pivot Point 1.3374

  • R1 1.3441
  • R2 1.3548
  • R3 1.3722

GBP/USD– Trading Tip

The GBP/USD is presently consolidating around at1.3457, placing around 19-month high to 1.3515 during the US session yesterday. The UK election exit polls foretelling a big win for the incumbent Prime Minister Boris Johnson. 

The GBP/USD pair’s 14-day relative strength index (RSI) is now floating around 80.47. I must say it’s the highest mark since January 2018. An above 70-reading shows overbought situations. Consider capturing retracement below 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the bullish track and representing some moderate gains mainly due to fresh trade optimism between the United States and China. As of writing, the currency pair is currently trading at 109.38 and consolidates in the range of 109.31 – 109.44.

Notably, the currency pair had some good 2-way price moves on Friday and was impressed by the full market risk-on sentiment, which turned out to be one of the major reasons that affected the Japanese yen’s as a perceived safe-haven status. 

However, the USD/JPY pair quickly reversed an early decline to sub-109.00 levels and recovered to multi-month highs in the wake of optimism of UK Parliamentary elections.

However, the bullish momentum failed near the 109.70 regions after the disappointing release of the United States’ monthly retail sales data, which kept the greenback buyers on the defensive.]The uncertainty regarding the United States President Donald Trump’s decision to cancel the December 15 tariff-hike on Chinese imports further helped to the pair’s intraday pullback of around 35-40 pips.

It should be noted that the USD/JPY currency pair finally closed unchanged for the day but succeeded in recovering some positive traction. That might have been due to the United States Trade Representative Robert Lighthizer’s comments on Sunday, saying that the phase-one Sino-US trade deal is done. Under the agreement, China said it would increase agricultural purchases due to the US’ decision not to attempt a new round of tariffs.

Daily Support and Resistance

  • S3 108.42
  • S2 108.92
  • S1 109.13

Pivot Point 109.42

  • R1 109.63
  • R2 109.92
  • R3 110.42

USD/JPY – Trading Tips

The USD/JPY rose 0.8% to 109.40 as investors’ risk appetite grew. The pair is heading towards the double top resistance level of around 109.700. Below this, the USD/JPY is likely to show a bearish correction of up to 38.2% level, which stays at 109.200. 

On the higher side, the bullish breakout of USD/JPY can lead the Japanese pair towards 110.300. The MACD and RSI are in support of the bullish trend. 

All the best!

Categories
Forex Course

Introduction – Forex Academy’s Forex Course 2.0

In the previous course, we started off by understanding what Forex Market is actually about and went on until the concepts related to margin trading. Thank you for the fantastic response to the Course 1.0. Now, its time to step up our learning a bit and move to the next level.

In the previous course, we started off by understanding what Forex Market is actually about and went on until the concepts related to margin trading. Thank you for the fantastic response to the Course 1.0. Now, its time to step up our learning a bit and move to the next level.

In the previous course, we started off by understanding what Forex Market is actually about and went on until the concepts related to margin trading. Thank you for the fantastic response to the Course 1.0. Now, its time to step up our learning a bit and move to the next level.

In this course, we shall be discussing two of the most important topics. They are

✫ Forex Brokers

✫ Types of Analysis

Forex Brokers

If we see back in the ’90s, it was pretty difficult to participate in the retail Forex market due to its high transaction costs. Also, there were many restrictions put up by the government to the people who wanted to participate in the Forex market. However, as time passed, the CFTC (Commodities Futures Trade Commission), a U.S. regulatory agency, decided to bring an end to these complications. So, they passed a couple of bills – the ‘Commodity Exchange Act’ and the ‘Commodity Futures Modernization Act,’ which opened doors for online Forex brokers to ease the process for retail traders.

Then, with the introduction to the world wide web, it became extremely easy for small retail traders to open a forex trading account. Moreover, with an exceptional demand, thousands of Forex brokers came up to benefit from the booming Forex industry as well.

Coming to the present day, we learned about the Margin trading facility provided by the brokers. Now it is time to understand the different types of Brokers in the foreign exchange market. Hence, in this course, we shall go over everything you need to know about Forex Brokers.

Types of Analysis

In the second installment of the course, we will understand a very vital topic, which is on Types of Market analysis. Broadly speaking, there are three ways to analyze the market.

✔︎ Technical Analysis – This analysis is the study of price movement using trading tools like charts and indicators.

✔︎ Fundamental Analysis – It is the analysis of currency by considering its social, political, and economic factors.

✔︎ Sentiment Analysis – Are you under the impression that Forex market analysis is all about numbers and math? That is true to a great extent. But, on top of all those complex numbers, Forex has a close relation with human psychology too. In this type of analysis, traders understand the sentiment of other traders and try predicting the future of the market.

In this course, we will present all the types of analyses mentioned above. By the end of this course, you will also be able to understand how to combine all of these analyses and make your trades more holistic. The format will be similar to that of Course 1.0. A concept will be explained clearly in less than 500 words, and at the end of the course, you can check your learnings by taking a quick 4 – 5 question quiz.

We will start Course 2.0 by understanding the types of Brokers existing in the Forex Market. Are you excited to learn more? Stay tuned for the most amazing, simple, and informative content. Cheers!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 12 – Top Trade Setups In Forex – U.K. Voting and ECB in Play! 

 

 

The U.S. dollar declined versus other major currencies as the Fed signaled that interest rates could be stable at current levels through 2020. The ICE U.S. Dollar Index sank to 97.08, the lowest level since August.

The euro rose 0.4% to $1.1133. The European Central Bank is expected to keep its monetary policy unchanged later today.

As expected, the Federal Reserve maintained the rates after cutting them at three earlier meetings. Fed Chairman Jerome Powell stated that monetary policy is well-positioned for the expanding economy, where the jobs market is expected to remain strong and inflation moderate.

Economic Events to Watch Today

Let’s took at these fundamentals.

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair slightly recovered in the last hour in the wake of inflation data released from the United States, which made the EUR/USD pair weaker. As of writing, the EUR/USD currency pair is currently trading 1.1094 but virtually unchanged daily near the 1.1090 handles. 

The data published by the United States (U.S.) Bureau of Labor Statistics (BLS) on Wednesday showed that the core Consumer Price Index (CPI) in the United States stayed unchanged at 2.3% every year during November. Although these figures came in line with the market expectation, the initial reaction caused the U.S. Dollar Index to drop to a fresh session low below the 97.50 marks.

Despite this, the EUR/USD currency pair may not pick up bid further in the coming hours because traders are unlikely to take large bets before the Federal Reserve Open Market Committee monetary policy announcements. However, investors don’t see the Federal Reserve cutting rate again; the updated economic projections will provide fresh hints regarding the rating outlook in 2020. 

After the FOMC event, investors’ eyes will shift to the European Central Bank’s (ECB) meeting and President Lagarde’s first press conference on Thursday.

According to the ECB event, we will not see the steady bullish progress in the EUR currency because policy continuity should be the main takeaway. Lagarde’s style and sound is a wild card. Preventing an early misstep there, the slight declines we see to growth may be offset upgrades to next year’s inflation forecast.

At the Fed front, the Federal Reserve is expected to keep the Fed Funds rate stable at the 1.50 – 1.75% range. After cutting interest rates 3-times in a series, for now, market participants see no change today and also at the January meeting. Most members of the Federal Open Market Committee (FOMC) mentioned they think the current stance of policy appropriate. 

Looking forward, the Federal Reserve will announce its decision regarding monetary policy today at 19:00 GMT. Chairman Jerome Powell will read a statement and will hold a press conference at 19:30 GMT. 

Daily Support and Resistance

  • S3 1.102
  • S2 1.1043
  • S1 1.1054

Pivot Point 1.1066

  • R1 1.1076
  • R2 1.1089
  • R3 1.1111

EUR/USD– Trading Tips

The EUR/USD has crossed over its 5-month downtrend at 1.1113. The EUR/USD is trending higher but has not gained any support until now. The EUR/USD has next support near 61.8% Fibonacci support level of 1.1105.  

While the resistance stays around 1.1190, and the 1.1225 horizontal resistance mark strictly follows it. Considering the recent crossover on MACD, the pair may trade bearish below the 1.1100 level today. 

GBP/USD– Daily Analysis

The GBP/USD currency pair dropped but recovered a significant part of its early declines to weekly lows manly in the reaction to the latest election polls results. As of now, the GBP/USD currency pair is currently trading near the 1.3179 and consolidates in the narrow range between 1.3108 – 1.3188 after the Fed holding rates steady yet signaling that there will not be a change in rates in 2020, something quite to the contrary of Fed watchers.

The pair continued the previous session’s late pullback from over eight-month highs and saw some follow-through long-unwinding trade on Wednesday in the wake of the latest U.K. election poll, which tilted towards a hung parliament.

A closely watched YouGov’s poll based on the MRP model showed a narrowing lead for Prime Minister Boris Johnson’s Conservative Party, now expected to win a majority of 28 seats in the parliament, falling sharply from 68 last month.

The slight pick up in the greenback demand, despite the uncertainty of President Trump regarding the phase-one trade deal between the United States and China, further collaborated to the pair’s intraday slide to the 1.3100 neighborhood.

No:1 Key takeaways from FOMC statement and projections

No:2 The market has priced in virtually no chance of rate move through February.

No:3 IOER 1.55% vs 1.55% prior.

No:4 Fed drops language about ‘uncertainties about this outlook remain.’

No:5 The vote was unanimous.

No:6 The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate.”

No:7 No changes in the economic outlook paragraph*

No:8 Says, “the current stance of monetary policy is appropriate.”

No:9 Leaves forecasts for GDP and inflation unchanged lowers 

unemployment.

No:10 The median forecast is for one rate hike in 2021 and one in 2022.

Looking forward, we are now counting down to the U.K. election vote for Thursday, where results are expected to come in from around 0200 GMT onwards. Pound Sterling has been improving because of yesterday’s YouGov outcome that proved the Conservative’s lead was narrowing. 


Daily Support and Resistance

  • S3 1.3056
  • S2 1.3104
  • S1 1.3124

Pivot Point 1.3153

  • R1 1.3173
  • R2 1.3202
  • R3 1.325

GBP/USD– Trading Tip

The GBPUSD is displaying a solid bullish bias as traders seem confident about the victory of the Conservative party and assume Boris Johanson to win the election. The GBP/USD may persist massively volatile today, and a day after, as the election result will start reaching out by tomorrow morning. On the higher side, the GBP/USD is expected to find resistance around 1.3265 and 1.3336. While the support can be seen near 1.3185 and 1.3110.

The RSI and MACD are in the bullish zone, signaling chances of a bearish correction, but then the Sterling will be found to do more upward movement. 

USD/JPY – Daily Analysis

The USD/JPY currency pair initially hit the bullish track and rose to 108.76 and the reversed falling to 108.57, the new daily bearish level after the decision of the Federal Reserve to keep the rate unchanged. As of writing, the USD/JPY currency pair is currently trading at 108.60, slightly lower as compared to previous before the statement.

The greenback dropped across the bard and hit the fresh bearish levels. The U.S. Dollar Index dropped under 97.30, the lowest level since November 4. The United States’ yields moved to the downside, and equity prices in Wall Street rose but remain under the highs. 

At the Sino-US front, the clock is ticking because we close in on the deadline on the so-called ‘phase- one’ deal and/or tariff delay by December 15. We are awaiting an announcement from U.S. President Donald Trump to come before the weekend’s deadline. Moreover, the news yesterday that tariffs would be delayed caused a short period of risk-on in the markets. Still, the news was unconfirmed, and Trump’s closest advisers tell the decision is finally depend on the president.

Daily Support and Resistance    

  • S3 108.06
  • S2 108.31
  • S1 108.43

Pivot Point 108.56

  • R1 108.68
  • R2 108.8
  • R3 109.05

USD/JPY – Trading Tips

On Thursday, the dovish FOMC and weaker U.S. dollar have driven sharp selling in the USD/JPY currency pair this week. For now, the pair is trading above 108.550, which is working as a double bottom support level.

A bearish breakout of this level can trigger selling until 108.250. The USD/JPY has already completed 81% retracement on three hourly charts, and this level can give some support to USD/JPY. Above this, the pair may find resistance around 108.900. Let’s wait for NFP to determine the further trend of USD/JPY. 

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 11 – Top Trade Setups In Forex – Brace for FOMC & Fed Rate!

The forex market extends trading sessions mostly with the mixed sentiments as the trader’s eye remains on the Fed Policy decision and CPI rate today. The FOMC will publish its policy statement, and Chairman Powell will be giving his comments on the policy standpoint. Ahead of this event, the U.S. Dollar Index is down 0.22% at 97.45 on Tuesday, supporting the pair stay relaxed above the 0.6800 handles. 

The forex market extends trading sessions mostly with the mixed sentiments as the trader’s eye remains on the Fed Policy decision and CPI rate today. The FOMC will publish its policy statement, and Chairman Powell will be giving his comments on the policy standpoint. Ahead of this event, the U.S. Dollar Index is down 0.22% at 97.45 on Tuesday, supporting the pair stay relaxed above the 0.6800 handles. 

The forex market extends trading sessions mostly with the mixed sentiments as the trader’s eye remains on the Fed Policy decision and CPI rate today. The FOMC will publish its policy statement, and Chairman Powell will be giving his comments on the policy standpoint. Ahead of this event, the U.S. Dollar Index is down 0.22% at 97.45 on Tuesday, supporting the pair stay relaxed above the 0.6800 handles. 

Today, the trader’s focus will stay on the U.S. Monetary Policy and CPI rate from the U.S. Let’s brace for it. 

Economic Events to Watch Today

Let’s took at these fundamentals. 

AUD/USD – Daily Analysis

The AUD/UD currency pair flashing green and rose to 0.6835, mainly due to the upbeat data from Australia and unexpectedly higher inflation figures from China. As of writing, the AUD/USD pair is currently trading at 0.6814 and consolidates in the range between the 0.6800 – 0.6837.

The currency pair struggled to maintain its recovery rally due to a lack of progress surrounding the United States and China trade war and fell to a fresh weekly low of 0.6800 before recovering modesty.

The National Australia Bank’s Business Conditions Index remained unchanged at 4 in November, but it beat the expectations of 2. On the other, the annual House Price Index for the third quarter came in at -3.7%, after a second quarter’s figure of -7.4%, which supported the Australian Dollar.

In the second half of the day, the Wall Street Journal (WSJ) reported that the U.S. and China’s trade negotiators are working toward delaying the December 15 tariff hike. That gave a boost to the market sentiment and trade-sensitive AUD.

During the Asian session on Wednesday, Westpac Consumer Confidence Index from Australia, which is expected to drop to -0.7% in December from 4.5% in November, will be keeping under the eyes. 

Following in the day, the FOMC will release its policy statement, and Chairman Powell will be delivering his remarks on the policy outlook. Ahead of this event, the U.S. Dollar Index is down 0.22% at 97.45 on Tuesday, supporting the pair stay relaxed above the 0.6800 handles.

While reviewing Wednesday’s FOMC meeting, “after three cuts in a series, we expect the Fed to remain on hold (target range 1.50-1.75%) when it meets next week,” said Danske Bank analysts. “FOMC members have made it clear that they think the ‘current stance of monetary policy is appropriate’ and that they now want to wait some time and see how everything plays out before acting again.”


Daily Support and Resistance

  • S3 0.6795
  • S2 0.6811
  • S1 0.6817

Pivot Point 0.6826

  • R1 0.6833
  • R2 0.6842
  • R3 0.6858

AUD/USD– Trading Tips

On Wednesday, the AUD/USD is consolidating mostly bearish after falling below 38.2% Fibonacci retracement at 0.6820. It has also completed 50% Fibonacci retracement at 0.6795. The AUD/USD pair is now trading around 0.6808, in between the upper limit of 0.6820 and a lower limit of 0.6795. 

 A bearish breakout of 0.6795 level can extend selling until 0.6775. The MACD is holding below 0, suggesting the chances of a bearish trend continuation in Aussie. Let’s look for buying above 0.6775 and selling below 0.6820level. 

 

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing green and hit the seven-months high from the bearish level of 1.3132 to 1.3189 while heading toward the United Kingdom elections on Thursday, and the result of elections will be released early Friday morning. As of writing, the currency is currently trading at 1.3188 and consolidates in the range between the 1..3132 to 1.3197.

According to the current situation, the Tories are ready to win the U.K. election, which may put the Brexit deal to bed. Today, the United Kingdom’s economic data don’t take a front seat due to the election hype, despite flat figures for Gross Domestic Produce for October. 

The GDP figures have followed 2-consecutive monthly contractions, which means we have now seen 3-consecutive months of negative/zero m/m growth for the 1st-time since 2009.

It should be noted that after this week’s snap December election, the next difficulty for the United Kingdom markets is next week’s Bank of England decision. However, the United Kingdom data continues to fall at a moderate rate since the last BoE meeting, which drives the dovish sentiment regarding the next rate decision. 

Looking forward, the markets will keep their focus on the Federal Open Market Committee and the Federal Reserve after the interest rate decision. Rates are expected to remain stable at 1.50-1.75%, while patience rhetoric will follow previous Federal Reserve speeches and statements furnished with preconditions before rate cut again in the future. 

    

Daily Support and Resistance

  • S3 1.3056
  • S2 1.3104
  • S1 1.3124

Pivot Point 1.3153

  • R1 1.3173
  • R2 1.3202
  • R3 1.325

GBP/USD– Trading Tip

The cable pair holds a bullish tone, but it is showing some short-term bearish signals after being unable to stay on top of 1.3160. Nevertheless, the trend in the pair points clearly to the upside, and consolidation of the GBP/USD above 1.3180 would expose the pair towards 1.3200. The prices need to cross May month high near 1.3180 to target 1.3200 and 1.3270 figures to the north, declining to do so highlights Wednesday’s top surrounding 1.3120 as immediate support. 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the bullish track and reached 108.75, mainly due to the Wall Street Journal reported that the United States and China trade talks are working toward delaying the tariff hike. After fastening to a fresh daily bullish of 108.75, the pair USD/JPY currency pair reversed slightly and was last seen trading at 108.62, where it was up 0.05% on a daily chart.

The U.S. and Chinese trade negotiators are planning for a delay of a fresh round of tariffs set to impose on December 15, according to officials on both sides. The market reaction to this headline also provided the ten-year United States Treasury bond yield to cancel its daily losses and helped the S&P 500 futures to move into the positive territory, pointing out to a positive shift in the market sentiment.

Meanwhile, the U.S. Dollar Index remains to move sideways a little above the 97.50 marks to allow the risk perception to continue to drive the pair’s action.

At the starting of today, the NFIB Business Optimism Index in the U.S. increased to 104.7 during November from 102.4, but the Unit Labor Costs rose 2.5% in the 3rd-quarter to drop short of the market expectation for an increase of 3.3%. But, these readings were largely ignored by the market members ahead of the FOMC’s monetary policy announcements on Wednesday. 

Daily Support and Resistance

  • S3 108.06
  • S2 108.31
  • S1 108.43

Pivot Point 108.56

  • R1 108.68
  • R2 108.8
  • R3 109.05

USD/JPY – Trading Tips

On Wednesday, the USD/JPY is likely to trade sideways until the release of FOMC and U.S. inflation rates. The pair is trading above 108.550, which is working as a double bottom support level. A bearish breakout of this level can trigger selling until 108.250. The USD/JPY has already completed 81% retracement on three hourly charts, and this level can give some support to USD/JPY. Above this, the pair may find resistance around 108.900. Let’s wait for FOMC to determine the further trend of USD/JPY. 

All the best!

Categories
Crypto Market Analysis

Daily Crypto Review, Dec 10 – JP Morgan launching its blockchain network in 2020

The crypto market has its first red day after a green weekend. Most cryptocurrencies ended up in the red. If we look at the past 24 hours, Bitcoin’s price decreased by 1.76%. It is now trading for $7,353. Meanwhile, Ethereum lost 0.43%, while XRP fell 2%.

The crypto market has its first red day after a green weekend. Most cryptocurrencies ended up in the red. If we look at the past 24 hours, Bitcoin’s price decreased by 1.76%. It is now trading for $7,353. Meanwhile, Ethereum lost 0.43%, while XRP fell 2%.

The crypto market has its first red day after a green weekend. Most cryptocurrencies ended up in the red. If we look at the past 24 hours, Bitcoin’s price decreased by 1.76%. It is now trading for $7,353. Meanwhile, Ethereum lost 0.43%, while XRP fell 2%.

The biggest top100 crypto gainer for today is Chainlink, with gains of 10.85%. On the other hand, the cryptocurrency that lost the most today was Matic Network, which lost 50.4% of its value.

Bitcoin’s dominance stayed at the almost exact place when compared to where it was yesterday. Its dominance is currently 66.56%, which represents an increase of 0.03% from yesterday’s value.

The cryptocurrency market’s market capitalization dropped in the past 24 hours. The market cap is currently at roughly $199.46 billion. This value represents an increase of $4.7 billion against the value it had on yesterday.

What happened in the past 24 hours

JPMorgan announced the launch of its blockchain-based payment network for the Japanese market in early 2020. The payment network is based on JPMorgan’s in-house blockchain platform, Quorum. The Interbank Information Network (IIN) wants to improve payment transactions as well as data sharing between banks.

Bloomberg’s report says that over 80 Japanese banks have a serious intent to join the platform. Out of the 365 total members that announced to join the platform, over 20% are Japanese banks.

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Technical analysis

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Bitcoin

After a great weekend, Bitcoin came back to almost the exact same spot it was in before it. The biggest cryptocurrency managed to lost its gains and fall under the $7,415 resistance, which is now turned support. The price is now consolidating between the $7,415 resistance and $7,314 Fib retracement line which is now acting as support. The immediate support line got tested twice, but held up both times.


Bitcoin’s volume spiked during the price drop but is now normalizing at lower levels. Its RSI levels fell down from being close-to overbought and normalized as well.

Key levels to the upside                    Key levels to the downside

1: $7,415                                           1: $7,314

2: $7,565                                           2: $7,240

3: $7,828                                           3: $7,120

Ethereum

Ethereum followed Bitcoin once again, which became almost a daily occurrence whenever big moves happen. Ethereum bulls stepped in and brought the price above the resistance of $150.5 over the weekend. After that happened, Ethereum immediately had a small level retesting, but the real test was ahead (as we reported yesterday). As the bears gathered and pulled the price down, the $150.5 resistance did not hold up, and Ethereum went under it.


Ethereum’s volume is currently really low relative to the previous days. Its RSI is in the middle of the value range.

Key levels to the upside                    Key levels to the downside

1: $150.5                                             1: $144.1

2: $155.8                                            2: $133.5

3: $161.1                                            3: $128.9

Ripple

It’s underwhelming to say that XRP broke its uptrend. After a whole week of a steady increase in price, it dropped significantly and lost around 40% of its gains from the whole uptrend move. After a sudden burst towards the upside on Dec 8, the price reached $0.234 but quickly started falling due to bulls not having enough buying pressure. The downward-facing move continued, and XRP’s price dropped from $0.234 all the way down to $0.222. However, this key level held up, and the price stabilized, at least for the time being.


There was no volume increase when this price-drop happened, which is quite interesting. XRP’s RSI value also returned to the bottom half of the range.

Key levels to the upside                    Key levels to the downside

1: $0.2267                                          1: $0.222

2: $0.234                                            2: $0.2182

3: $0.2351                                          3: $0.2145

Categories
Forex Economic Indicators Forex Fundamental Analysis

Fundamental Analysis – A Brief Introduction

Most traders just focus and use technical analysis (TA) to make trade decisions, but they forget that trading is connected with value. The perceived value of an asset is what makes the market move up and down. And the perception of that value by the market is directly related to the fundamental information available.

Most traders just focus and use technical analysis (TA) to make trade decisions, but they forget that trading is connected with value. The perceived value of an asset is what makes the market move up and down. And the perception of that value by the market is directly related to the fundamental information available.

Most traders just focus and use technical analysis (TA) to make trade decisions, but they forget that trading is connected with value. The perceived value of an asset is what makes the market move up and down. And the perception of that value by the market is directly related to the fundamental information available.

Fundamental Analysis is simply a type of market analysis which involves studying the economic or political position of a country in order to be able to assess the relative value of currencies more effectively. In a nutshell, Fundamental analysis is the study of economic factors that influence foreign exchange rates to predict future prices.

Traders studying macroeconomic data of the major economies and try to interpret the economic events, news, and press releases with the aim of predicting future moves a currency can make. Traders must also take into account the microeconomics of a country, such as supply and demand, consumer expending, and unemployment to assess the macro trends in the currency markets and always be on the right side when trading.

Also, the different scheduled news releases that are the benchmark for fundamental analysis can create price shocks in the market when the figures do not match the analysts’ consensus. Therefore, it is critical, also, to keep track of the Economic Calendar to avoid the potential volatility the news event can produce.

So when embarking on doing your own fundamental analysis, there are a few economic indicators considered key underlying drivers. Let’s have a short glance at these basic economic indicators.

The Gross Domestic Product (GDP)

The GDP data is used primarily to gain insight into a country’s economic strength, is calculated annually, and the broadest measure of a country’s economy. It is a representation of the value of all goods and services produced within that country over a defined period of time. The GDP data is one of the Economic Indicators which is closely monitored as it represents a countries contraction or expansion in a straightforward way, allowing the Trader to see whether a country is experiencing rapid growth or going into recession. The GDP growth rates from quarter to quarter can be the driving factors in the performance of a given currency.

Interest rates

The interest rate is one of the most critical factors that drive the Forex market. The interest rate of a country helps us to determine how the central bank is responding to the economic factors present in that country at the time. When a country is experiencing consumer inflation, the central bank will increase interest rates to curb inflation. When a country’s growth weakens, it will reduce the interest rates to spur economic growth. When a central bank changes interest rates, it creates movement in the market. It causes volatility, and if you are armed with an accurate prediction can lead to a beneficial outcome on a specific trade.

Inflation rate

Another piece of fundamental analysis data that one needs to look at is the inflation rate. This is the rate at which goods and services are valued, which changes over time. We measure inflation at both the consumer level and producer level. The producer level is defined as wholesale companies, and the consumer level is defined as households and consumers. A high rate of inflation can cause a currency value to rise as traders anticipate a rise in interest rates. The central bank, to protect consumers from excessive inflation, tends to increase the interest rates. This reduces the spending power that consumers have and thus reducing the price of goods and services.

Unemployment Rate

The unemployment rate is an indication of that country’s workforce that is actively seeking employment or are currently unemployed. If a country has a high unemployment rate, then it would be considered a weakening economy and lead to the currency deprecating. Low unemployment rates indicate a strong economy and increase the demand for the currency.

The Debt-to-GDP Ratio

The debt to GDP ratio is the ratio of the public debt that a country has compared to its Gross domestic product. If a country is unable to pay back its debt, it will default, and a financial panic may erupt. The usual bar set for GDP growth is 77% if it exceeds this amount over an

Balance of trade (BOT).

The balance of trade is defined as the difference between the value of a country’s imports and exports over a set period of time. The BOT is used by economists to measure the strength of a country’s economy. A Sustained trade deficit is considered bad for the economy. Therefore, it will also hurt the valuation of its currency, whereas a strong surplus on the BOT will drive the price of the country’s currency higher.

Current account to GDP

Two components make up a country’s Balance of Payments, the current account, and capital account. The current account consists of the trade balance, the net factor income, and net cash transfers, which are all measured in the domestic currency.
When the account balance of a country is positive, that country is referred to as a net lender to the rest of the world. When the account balance is in the negative, then the country becomes a net borrower to the rest of the world. This ratio of the current account balance to the Gross Domestic Product (or % of GDP) provides the country’s ability to pay back its debt and is an indication of the country’s competitiveness in world markets.

In conclusion, when fundamental analysis data is used correctly, it is an invaluable resource for any forex trader. By looking at the bigger picture of how a country is performing, it gives an insight into how the market will move, allowing you to profit from your trades.

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Forex Market Analysis

Daily F.X. Analysis, December 10 – Top Trade Setups In Forex – Eyes on British GDP Figures! 

The market continues to trade mixed risk sentiment due to diminishing expectations of no interest rate cuts by the Fed and delay in the trade deal. The top White House Economic Adviser, Larry Kudlow, confirmed on Friday that the December 15 deadline to impose new tariffs on around $156 billion worth Chinese products remains in place.  

The market continues to trade mixed risk sentiment due to diminishing expectations of no interest rate cuts by the Fed and delay in the trade deal. The top White House Economic Adviser, Larry Kudlow, confirmed on Friday that the December 15 deadline to impose new tariffs on around $156 billion worth Chinese products remains in place.  

The market continues to trade mixed risk sentiment due to diminishing expectations of no interest rate cuts by the Fed and delay in the trade deal. The top White House Economic Adviser, Larry Kudlow, confirmed on Friday that the December 15 deadline to impose new tariffs on around $156 billion worth Chinese products remains in place.  

At the same time, he also said that the U.S. President Donald Trump is satisfied with the recent progress in trade discussions. Yet he is not looking to go with the current phase one trade deal. 

Today, the trader’s focus will stay on the British GDP and further events from the Eurozone. Let’s brace for it. 

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair continues its bullish moves mainly due to the greenback’s bearish reversal across the board and weaker United States Treasury yields. As of writing, the EUR/USD pair is trading near the 1.1064 and consolidates in the narrow range between the 1.1053 – 1.1078.

Besides, the currency pair picked up the fresh buying during the last hour, in the wake of the revived trade war between the United States and China. The dismal of China trade data also depressed the market mood.

The lowered demand for higher-yielding assets such as the Treasury yields pushed the U.S. dollar broadly lower. The USD index corrects Friday’s positive U.S. payrolls led upsurge to 97.84, now trading at session lows of 97.63, -0.15% on the day.

Even after the recent bullish moves, the currency pair still in the red zone because the greenback may remain supported by the stronger United States employment data that diminished the 2020 rate cut expectations by the Federal Reserve.

At the ECB front, the European Central Bank (ECB) President Largerde will deliver her first speech as a president regarding monetary policy during this Thursday. She will likely provide a hint about the ECB’s commitment to the recent stimulus package that included a rate cut and the restarting of the quantitative rate cut(Q.E.) program.

Meanwhile, the markets now await the Eurozone Sentix Investor Sentiment data, which is de during the European session today. Better-than-expected German Trade and Current Account data also collaborate with the positive tone around the shared currency.

Furthermore, the investor’s confidence in the Eurozone increased sharply in December, despite rising US-China trade tensions and the German slowdown, the latest data published by the Sentix research group showed on Monday.

The quote climbed to +0.7 in December from -4.5 in November and against a figure of -4.9 expected. The investors’ confidence hit the highest since March 2018.


Daily Support and Resistance

  • S3 1.093
  • S2 1.1
  • S1 1.1031

Pivot Point 1.107

  • R1 1.1101
  • R2 1.1141
  • R3 1.1211

EUR/USD– Trading Tips

The EUR/USD has disappointed in its first test of the 5-month downtrend at 1.1113. The EUR/USD is trending lower but has not gained any support until now. The EUR/USD has next support near 61.8% Fibonacci support level of 1.1040.  

While the resistance stays around 1.1070, and the 1.1075 horizontal resistance mark strictly follows it. Considering the recent crossover on MACD, the pair may trade bearish below the 1.1070 level today. 

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing red and representing declines to 1.3135 from the highest level since early April of 1.3180 after the release of a new poll ahead of the snap December elections in the United Kingdom. The Cable experienced a slight bearish reversal on Monday and mostly traded at 1.3155/60, up 20 pips for the day. 

The GBP/USD currency pair was seen on the bullish track on Monday, but it remains under 1.3200. The GBP continues to be supported by the polls showing a top position of the Conservatives Party. Just minutes ago, the fresh opinion poll by ICM revealed that the United Kingdom Prime Minister Boris Johson’s Conservative Party remain unchanged at 42%. In contrast, support for the party rose by 1 point to 36%. The Tory slightly pushed lower the GBP in advance.

The reversal in the GBP/USD currency pair was limited as the volatility remain low, and the U.S. dollar continued to show slight bearish bias. 

Looking forward, the critical event in the U.S. will be the FOMC meeting on Wednesday. Analysts and traders are also focusing on trade progress as the December 15 deadline for hiking tariffs on Chinese goods remains in highlights. 


Daily Support and Resistance

  • S3 1.3004
  • S2 1.3069
  • S1 1.3103

Pivot Point 1.3134

  • R1 1.3168
  • R2 1.32
  • R3 1.3265

GBP/USD– Trading Tip

On the technical side, the cable pair holds a bullish tone, but it is showing some short-term bearish signals after being unable to stay on top of 1.3160. Nevertheless, the trend in the pair points clearly to the upside, and consolidation of the GBP/USD above 1.3180 would expose the pair towards 1.3200. 

The prices need to cross May month high near 1.3180 to target 1.3200 and 1.3270 figures to the north, declining to do so highlights Wednesday’s top surrounding 1.3120 as immediate support.

In the daily timeframe, the GBP/USD has an upward crossover on MACD. Lastly, the three white candles on the daily timeframe are suggesting bullish bias among traders. 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the five-days low below the 108.50 ahead of important macroeconomic events. The pair struggle to stage a recovery on Monday and was last seen trading at 108.49, a few pips above the 5-day low that it set at 108.43 in the last hour.

The economic figures showed that the business sentiment grew slightly during November with the Eco Watchers Survey’s Outlook and the Current indexes both coming out better than their October figures.

Looking forward, the trader will keep their eyes on the fresh progress surrounding the United States and China trade talks. If both sides could make a deal and sign the phase-one of the trade deal ahead of the United States tariff hike on Chinese imports on December 15, a relief rally will likely cause the Japanese Yen to lose interest as a safe-haven and support the pair gain bullish moves.

The U.S. Federal Open Market Committee (FOMC) will be publishing its monetary policy decisions on Wednesday. In contrast, the FOMC is not expected to make any changes to its policy rate. It will be interesting to see how the Fed estimates the positive Gross Domestic Product (GDP) and Nonfarm Payrolls (NFP) data. 

Last week on Friday, the U.S. Bureau of Labor Statistics reported that Nonfarm Payrolls increased by 266,000 during November to cross the market expectation of 180,000 and provided a boost to the U.S. Dollar Index. Consequently, the USD/JPY pair got bullish support. Meanwhile, the S&P 500 futures are virtually unchanged on the day, hinting that Wall Street is likely to open flat to reiterate the neutral market sentiment.


Daily Support and Resistance   

  • S3 107.85
  • S2 108.26
  • S1 108.44

Pivot Point 108.68

  • R1 108.85
  • R2 109.1
  • R3 109.51

USD/JPY – Trading Tips

On Tuesday, the demand for haven assets and weaker U.S. dollar has driven sharp selling in the USD/JPY currency pair this week. For now, the pair is trading above 108.550, which is working as a double bottom support level.

A bearish breakout of this level can trigger selling until 108.250. The USD/JPY has already completed 81% retracement on three hourly charts, and this level can give some support to USD/JPY. Above this, the pair may find resistance around 108.900. Let’s wait for NFP to determine the further trend of USD/JPY. 

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 09 – Top Trade Setups In Forex – Mixed Risk Sentiment In Play!

The U.S. dollar rebounded against other major currencies, as the ICE U.S. Dollar Index rose 0.3% to 97.68, halting a six-session losing streak. EUR/USD lost 0.4% to close at 1.1060. Germany’s industrial production declined 1.7% on month in October (+0.1% expected).

The U.S. dollar rebounded against other major currencies, as the ICE U.S. Dollar Index rose 0.3% to 97.68, halting a six-session losing streak. EUR/USD lost 0.4% to close at 1.1060. Germany’s industrial production declined 1.7% on month in October (+0.1% expected).

The U.S. dollar rebounded against other major currencies, as the ICE U.S. Dollar Index rose 0.3% to 97.68, halting a six-session losing streak. EUR/USD lost 0.4% to close at 1.1060. Germany’s industrial production declined 1.7% on month in October (+0.1% expected).

The U.S. Labor Department reported that the economy added 266,000 nonfarm payrolls in November (+180,000 expected, +156,000 in October). The jobless rate dropped to 3.5% from 3.6%, the lowest level since 1969. Meanwhile, the University of Michigan Sentiment Index (preliminary reading) rose to 99.2 in December (97.0 expected) from 96.8 in November.

Let’s took at these fundamentals.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD currency pair is flashing red and representing marginal declines on the day, mainly due to the tension of the intensified trade war between the United States and China. As of writing, the currency pair is currently trading at 1.1055 and consolidates in the narrow range between 1.1053 – 1.1061.

As we know, the pair had closed above 1.1097 during the Thursday, canceling the lower highs setup on the daily chart and confirming the bullish reversal. The breakout was short-lived because the currency pair fell from 1.1110 to 1.1040 during the U.S. trading session in the wake of the Nonfarm Payrolls figure.

At the fed front, the traders priced out chances of 25-basis-points rate cut by the Federal Reserve rate cut in 2020 after the release of the upbeat United States employment report. While on the U.S. dollar front, the greenback may remain in buying mainly due to upbeat payrolls data and trade tensions.

The data released during the weekend showed China’s exports to the U.S. dropped by 23% in November, the most significant monthly decline since February. 

The depressing figures may convince the United States President Donald Trump that his trade war is creating desired results, and he will likely move forward with a tariff spike on $160 billion of Chinese goods.

At the Sino-US front, the tensions regarding the United States and China intensified trade war will likely keep the shared currency under pressure. Ultimately, the trade fears have pushed Germany, the Eurozone’s largest economy.

Daily Support and Resistance

  • S3 1.093
  • S2 1.1
  • S1 1.1031

Pivot Point 1.107

  • R1 1.1101
  • R2 1.1141
  • R3 1.1211

EUR/USD– Trading Tips

The EUR/USD has disappointed in its first test of the 5-month downtrend at 1.1113. The EUR/USD is trending lower but has not gained any support until now. The EUR/USD has next support near 61.8% Fibonacci support level of 1.1040.  

While the resistance stays around 1.1070, and it’s strictly followed by the 1.1075 horizontal resistance mark. Considering the recent crossover on MACD, the pair may trade bearish below the 1.1070 level today. 

GBP/USD– Daily Analysis

 The GBP/USD currency pair is flashing green and representing 0.10% gains on the day in the wake of weekend polls. As of writing, the GBP/USD currency pair is currently trading at 1.3146 and consolidates in the range of 1.3133 – 1.3151. 

The market traders seem very careful to continue the recent bullish streak beyond the 7-month high ahead of the snap December election in the United Kingdom.

Moreover, the weekend survey indicates that the ruling Conservative Party continues to maintain top position across all major surveys. However, the opposition Labour Party seems to cut the lead as far as data from ComRes and Deltapoll are concerned. 

The fresh news from the U.K. politics shows that the Prime Minister (PM) Boris Johnson agrees that there will be insignificant checks between the U.K. and Northern Ireland. The United Kingdom Prime Minister Boris Johson has been criticized many times for not coming in the General debates. Still, the recent one on Channel 4 looks to be suitable for the Tories. 

At the Sino-US front, the United States (U.S.) did not reduce the scope of fresh tariffs on Chinese goods that are up for December 15. The same thing keeps market players under pressure because phase-one talks are yet to provide any strong development.

The traders will keep their eyes on Thursday’s election, as well as monthly figures of Manufacturing Production, Industrial Production, and Gross Domestic Product will likely offer fresh direction to the cable pair.

Daily Support and Resistance

  • S3 1.3004
  • S2 1.3069
  • S1 1.3103

Pivot Point 1.3134

  • R1 1.3168
  • R2 1.32
  • R3 1.3265

GBP/USD– Trading Tip

On the technical side, the prices need to cross May month high near 1.3180 to target 1.3200 and 1.3270 figures to the north, declining to do so highlights Wednesday’s top surrounding 1.3120 as immediate support.

In the daily timeframe, the GBP/USD has an upward crossover on MACD. Lastly, the three white candles on the daily timeframe are suggesting bullish bias among traders. 

USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and found near the 108.58, in short, the pair stays moderately changed to Friday range despite the upbeat growth data from Japan. As of writing, the USD/JPY Currency Pair currently trading at 108.58 and consolidates in the narrow range between the 108.55 – 108.67.

The final figures of Japan’s 3rd-quarter (Q3) Gross Domestic Product (GDP) increased past-0.2% forecast and 0.1% preliminary expectations to +0.4% on QoQ basis. Though the annually figures matched no change expectations of 0.6%. Moreover, Japan’s Trade Balance on Balance of Payment (BOP) Basis for October crossed ¥1.1 B before a whooping ¥254 B.

Markets risk sentiment didn’t succeed in extending the previous gains because the traders look careful ahead of the critical week that includes the crucial central bank meeting and the general election in the United Kingdom. Moreover, recent polls of the British December snap election seem to keep the ruling Conservative Party at the top and decrease fears of the united kingdom political trauma.

At the Sino-US front, the United States tariffs of China are ready to happen on December 15, and the Trump administration wants a phase-one to turn the tariff’s switch off. However, China seems not in a mood to respect the U.S. and trade deal, even after supporting agricultural demand. Looking forward, traders may look for trade/political headlines for fresh impulse.

Daily Support and Resistance

  • S3 107.85
  • S2 108.26
  • S1 108.44

Pivot Point 108.68

  • R1 108.85
  • R2 109.1
  • R3 109.51

USD/JPY – Trading Tips

The boosted demand for haven assets and weaker U.S. dollar has driven sharp selling in the USD/JPY currency pair this week. For now, the pair is trading above 108.550, which is working as a double bottom support level.

A bearish breakout of this level can trigger selling until 108.250. The USD/JPY has already completed 81% retracement on three hourly charts, and this level can give some support to USD/JPY. Above this, the pair may find resistance around 108.900. Let’s wait for NFP to determine the further trend of USD/JPY. 

All the best!

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Forex Videos

Forex Academy Education For Absolute Beginners Session One – Becoming A Professional Trader

https://youtu.be/llluFYdKTWc

https://youtu.be/llluFYdKTWc

Forex.Academy Education For Absolute Beginners – Session One

Hello, and welcome to Forex Academy, your one-stop shop to complete education in foreign exchange currency trading, which is also known as Forex or FX.


The foreign exchange market is a global network of banks, financial institutions, governments, and retail traders who take advantage of the 5 trillion dollars that are traded every day in the foreign exchange market.

Many of the larger institutions buy and sell, or exchange currencies – which are always traded in pairs – and many other financial firms and also retail traders simply trade based on whether a currency pair is going up or down. If they place a buy trade and a pair goes up, they make money, and if they place a sell trade and the pair goes down, they also make money. And that is what happens most of the time, currency pairs go up and down against each other continually. And so traders bide their time and pick their moments to take on a trade.


Now while this may sound very daunting, if you think about it, you have probably been on holiday to a different country and spent some time shopping around online or at travel agents looking for the best currency exchange rate to give you more buying power on your holiday. In which case congratulations, you have already been trading currencies. I expect that a lot of you may have also enjoyed gambling at some time, perhaps at the roulette wheel in a casino, or playing cards such as Black Jack, and maybe you got lucky and made a little bit of money, however, typically the odds are stacked against you, and it’s a fact that the House always wins in the end.

But, what if you could go to a casino where the odds were stacked in your favor, of course, you would be very interested in that opportunity? Welcome to currency trading because if you take the time and effort to learn how to trade correctly, you can stack the odds in your favor when you trade currencies.

OK, the thought of spending a lot of time learning a new specialist subject might not seem like a lot of hard work, but if you think about it you will not strip down a car engine without first taking a mechanics course, and you wouldn’t take out a horse’s appendix without first going on a comprehensive vet’s course. And currency trading is no different. There is a lot to learn. However, the more you learn, the better trader you will become.

And here at Forex Academy, we have a wealth of education to pass on to you so that you can stack the odds in your favor and learn to trade currencies like a professional.

Categories
Forex Market Analysis

Daily F.X. Analysis, December 06 – Top Trade Setups In Forex – Brace for Nonfarm Payroll! 

The British pound extended its gains on expectations that Brexit uncertainty could be cleared when the ruling Conservative Party wins a majority in the December 12 general election. GBP/USD charged 0.4% higher to 1.3157, a fresh 7-month high. EUR/GBP declined 0.2% to 0.8438, which was last seen in May 2017.

The British pound extended its gains on expectations that Brexit uncertainty could be cleared when the ruling Conservative Party wins a majority in the December 12 general election. GBP/USD charged 0.4% higher to 1.3157, a fresh 7-month high. EUR/GBP declined 0.2% to 0.8438, which was last seen in May 2017.

The British pound extended its gains on expectations that Brexit uncertainty could be cleared when the ruling Conservative Party wins a majority in the December 12 general election. GBP/USD charged 0.4% higher to 1.3157, a fresh 7-month high. EUR/GBP declined 0.2% to 0.8438, which was last seen in May 2017.

The U.K. Society of Motor Manufacturers and Traders reported that new car registrations declined 1.3% on year in Nov. (-6.7% in Oct.).

The euro rose 0.2% to $1.1104. The eurozone’s third-quarter GDP growth (final reading) posted at 0.2% on quarter (as expected) and 1.2% on year (as expected). Also, the eurozone’s retail sales declined 0.6% on month in Oct. (-0.5% expected) but rose 1.4% on year (+2.2% expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

 

  

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing green and found above the November 21 high of 1.1107 despite the depressed German Factory Orders data. As of writing, the currency pair consolidates in the range of 1.1102 – 1.1110. The 14-day relative strength index is also representing bullish sentiment with an above-50 print.

The EUR/USD currency pair will be unlikely to take the significant declines even if the industrial production figures release below expectations. On the other hand, the positive data from the United States (NFP) may stop supporting the bullish technical setup. Changes in industrial production are widely followed as a primary indicator of strength in the manufacturing industry.

Looking forward, the Eurozone’s manufacturing hub Germany release Industrial Production figures for October at 07:00 GMT. The data was expected to show the factory activity increased at a seasonally adjusted rate of 0.1% month-on-month in October, but the actual data fell to -1.7%. Evidently, the EUR/USD is trading under pressure since it’s release. 


Daily Support and Resistance

  • S3 1.104
  • S2 1.1068
  • S1 1.1086

Pivot Point 1.1097

  • R1 1.1115
  • R2 1.1126
  • R3 1.1155

EUR/USD– Trading Tips

On Friday, the traders are waiting for the U.S. Non-farm Payroll and Employment change figures to drive the next movement in the market. 

The EUR/USD has next support is near mid-1.1050 and is strictly followed by the 1.1075 horizontal support mark. Considering the recent crossover on MACD, the pair may trade bullish above the 1.1070 level today. On the upper side, resistance stays around 1.1140 and 1.1170. 

GBP/USD– Daily Analysis

The GBP/USD currency pair hit the seven-month high and found near the 1.3160 ahead of the United States nonfarm payroll. As of writing, the currency pair consolidates in the range of 1.3153-1.3163. 

The recent polls of the United Kingdom December election maintain the ruling Conservative Party on the top place, Prime Minister Boris Johson seems to be stuck recently as the Tory leaders again reject to take part in ITV and BBC debates.

On the other hand, optimism surrounding the trade deal by the UK Chancellor Sajid Javid and ex-Brexit Party members’ who seem to push to vote Tories seem to play their roles. Moreover, the pairs’ bullish sentiment could also be attributed to the greenback weakness. 

Markets seem inactive and cautious because all eyes stay on the Novembers’ employment data from the United States. As a result, the United States’ ten-year treasury yields, and most of the Asian stocks stay modestly changed. 

Ahead of the U.S. jobs report, U.K. Halifax House Prices will likely entertain the traders. Notably, we expect payrolls to increase by a solid 200k in November, which is higher than the previous month’s 128k release. If this happens, the GBP/USD may face headwind to target the next resistance level of 

Daily Support and Resistance

  • S3 1.3021
  • S2 1.3082
  • S1 1.312

Pivot Point 1.3143

  • R1 1.3181
  • R2 1.3204
  • R3 1.3265

GBP/USD– Trading Tip

On the technical side, the prices need to cross May month high near 1.3180 to target 1.3200 and 1.3270 figures to the north, declining to do so highlights Wednesday’s top surrounding 1.3120 as immediate support.

In the daily timeframe, the GBP/USD has an upward crossover on MACD. Lastly, the three white candles on the daily timeframe are suggesting bullish bias among traders. 

USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and dropped from the 108.97 to 108.66 overnight, mainly due to the positive headlines which came from the United States and China trade. This helped the United States stocks to survive further gains. 

As of writing, the currency pair is trading near the 108.70 and consolidates in the range of 108.66-108.78. Recently the risk appetite was healthy, and investors were trading based upon the set of positive news during this week from the United States. Although, without any positive response from China, markets were afraid to take any action ahead.

Before the headlines, there were upbeat tones from the United States President Donald Trump, who said that the United States is having meetings and trade talks with China. Something may happen regarding the December 15 tariff, but we are not discussing currently.

As for U.S. yields, the two-year Treasury yields increased slightly from 1.56% to 1.60%, ten-year yields rose from 1.76 to 1.82%. “Markets are pricing a near to zero chance of rate cut at the Fed’s December 11 meeting but a terminal rate of 1.25%.

Looking forward, the trader will keep their eyes on the coming Nonfarm Payrolls. Nov Nonfarm Payrolls are expected to rise 185k and report that the unemployment rate is likely to stay at 3.6%. Average hourly earnings are expected to hold at 3.0%, still down from the 3.2% beforehand.


Daily Support and Resistance

  • S3 108.12
  • S2 108.46
  • S1 108.61

Pivot Point 108.81

  • R1 108.95
  • R2 109.15
  • R3 109.49

USD/JPY – Trading Tips

The boosted demand for haven assets and weaker U.S. dollar has driven sharp selling in the USD/JPY currency pair this week. For now, the pair is trading above 108.550, which is working as a double bottom support level.

A bearish breakout of this level can trigger selling until 108.250. The USD/JPY has already completed 81% retracement on three hourly charts, and this level can give some support to USD/JPY. Above this, the pair may find resistance around 108.900. Let’s wait for NFP to determine the further trend of USD/JPY. 

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 05 – Top Trade Setups In Forex – Get Ready for European GDP! 

On the forex front, the British pound bounced 0.9% to $1.3103, the highest close since May. Polls suggested a majority-win by Prime Minister Boris Johnson’s Conservative Party in the general election to be held next week, which could clear political uncertainty over Brexit. Meanwhile, the Markit UK Services PMI for November (final reading) was released at 49.3 (48.6 expected).

On the forex front, the British pound bounced 0.9% to $1.3103, the highest close since May. Polls suggested a majority-win by Prime Minister Boris Johnson’s Conservative Party in the general election to be held next week, which could clear political uncertainty over Brexit. Meanwhile, the Markit UK Services PMI for November (final reading) was released at 49.3 (48.6 expected).

On the forex front, the British pound bounced 0.9% to $1.3103, the highest close since May. Polls suggested a majority-win by Prime Minister Boris Johnson’s Conservative Party in the general election to be held next week, which could clear political uncertainty over Brexit. Meanwhile, the Markit UK Services PMI for November (final reading) was released at 49.3 (48.6 expected).

The euro closed a few pips lower at $1.1077. The Markit Eurozone Services PMI for November (final reading) posted 51.9 (51.5 expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

  

EUR/USD – Daily Analysis

The EUR/USD currency pair hit the multi-week highs just above the 1.1100 level, mainly due to the poor ADP data result. As of writing, the currency pair currently trading near the 1.1090 and consolidates in the range between 1.1067 – 1.1115.

The ADP showed the US US private sector added ‘just’ 67K jobs during last month, coming in well below estimates whereas the November’s print was also changed a tad lower to 121K (from 125K).

Looking forward, all eyes will be on I.S.M. Manufacturing for November, which is due to come out later in the NA session.

Eventually, the pair has stuck above the critical barrier at 1.1100 due to the continuous weak sentiment in the greenback and the intensified Sino-US trade war. 

IHS Markit reported that today’s data signals 0.1% GDP growth in the last quarter of the year, with manufacturing creating a notable resistance. While today’s figures steadied a bit from the previous reading, the numbers are at the lower end of what’s been reported over the last five years.

On the technical side, the EUR/USD pair is increasing 0.19% at 1.1102 and faces the next hurdle at 1.1161 (200-day SMA), followed by 1.1179 (monthly high Oct.21) and finally 1.1186 (61.8% Fibo of the 2017-2018 rally). On the other hand, a breakdown of 1.1040 (55-day SMA) would target 1.0989 (low monthly Nov.14) en route to 1.0925 (low Sep.3).

Daily Support and Resistance    

  • S3 1.0883
  • S2 1.097
  • S1 1.1025

Pivot Point 1.1057

  • R1 1.1112
  • R2 1.1145
  • R3 1.1232

EUR/USD– Trading Tips

The European traders are waiting for the GDP and Retail Sales data, which is due in a couple of hours. With an improved level of uncertainty, the greenback is getting weaker, which is why the EUR/USD is trading steadily in a narrow range. 

The EUR/USD has immediate support is near mid-1.1050 and is closely followed by the 1.1075 horizontal support mark. Considering the recent crossover on MACD, the pau may trade bullish above the 1.1070 level today. 

.

GBP/USD– Daily Analysis

The GBP/USD currency pair remains to flash green and hit the seven-months highs near the 1.3100 in the last trading hour. That happens after the incoming polls have hit a majority for the United Kingdom Prime Minister Boris Johnsons ruling Conservatives Party at the upcoming snap election, which is listed to occur on December 12.

It should be noted that the bullish sentiment in the pair did not take any effect by the weakness in the greenback, supported by a sharp intraday upward movement in the US Treasury bond yields and some positive trade-related headlines. Moreover, the report came that the United States and China are moving closer to a deal before the December 15 tariff due data.

The GBP/USD currency pair will likely be trying to improve the 1.3100 round-figure marks, although slightly overbought sentiments on intraday charts warrant some attention before initiating any new bullish positions. Market traders now look forward to the US economic docket, highlighting the release of ADP report and ISM Non-Manufacturing PMI, for some short-term impetus.

Daily Support and Resistance    

  • S3 1.2823
  • S2 1.2876
  • S1 1.2908

Pivot Point 1.2929

  • R1 1.2961
  • R2 1.2982
  • R3 1.3035

GBP/USD– Trading Tip

The GBP/USD’s bullish trend continues to dominate the market, and the pair is consistently heading north to test the initial resistance level of 1.3195. A bullish breakout of this mark can drive buying until 1.3335, the double top resistance level. 

In the daily timeframe, the GBP/USD has an upward crossover on MACD. Lastly, the three white candles on the daily timeframe are suggesting bullish bias among traders. 

AUD/USD– Daily Analysis

The AUD/USD pair flashing red and currently trading near the bearish range of 0.6853, mainly due to the intensified trade tension between the United States and China.

As of writing, the currency pair failed to continue its recent bullish streak and unfortunately came under pressure, as we know the pair registering 2-consecutive days of bullish streak in the wake of softer Austrian macro data.

Apart from this, Australia’s GDP growth slowed to 0.4% during the 3-months to September as compared to the previous quarter’s upwardly revised figures of 0.6% and worse than 0.5% expected.

At the Sino-US front, the overall sentiment on the AUD/USD currency pair affected mainly by the United States and China trade deal uncertainty. It should be recalled that the United States President Donald Trump said that the trade deal with China would likely not happen in 2020. As well as, the US US Congress on Tuesday overwhelmingly approved a bill condemning China’s mass detention of ethnic Muslims and called for sanctions against some officials responsible.

The AUD/USD currency pair left its recent bullish moves, and bearish sentiment remained strong so far, despite the weak greenback. Because investors continue to digest the latest trade developments, the greenback buyers remained on the defensive track, avoid a modest uptick in the US US Treasury bond yields.

Daily Support and Resistance    

  • S3 0.6699
  • S2 0.6752
  • S1 0.6785

Pivot Point 0.6806

  • R1 0.6839
  • R2 0.6859
  • R3 0.6913

AUD/USD– Trading Tips

The AUD/USD is trading slightly bearish to achieve 38.2% Fibonacci retracement at 0.6820. Over this, the Aussie has produced a series of bearish candles that are suggesting chances of a sell-off in Aussie. 

The AUD/USD may trade with a bullish bias above 0.6820 to aim 0.6850 and 0.6868 while the next support prevails around 0.6800. 

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 04 – Top Trade Setups In Forex – Eyes on US ADP Report! 

The market trades risk-off sentiment as the U.S. China trade war continues to play. The U.S. House of Representatives passed the Uighur Act, a bill to condemn the Chinese government for its mass internment of Uighur Muslims in Xinjiang. China has denounced the U.S. movement and has warned to take revenge.

The market trades risk-off sentiment as the U.S. China trade war continues to play. The U.S. House of Representatives passed the Uighur Act, a bill to condemn the Chinese government for its mass internment of Uighur Muslims in Xinjiang. China has denounced the U.S. movement and has warned to take revenge.

The market trades risk-off sentiment as the U.S. China trade war continues to play. The U.S. House of Representatives passed the Uighur Act, a bill to condemn the Chinese government for its mass internment of Uighur Muslims in Xinjiang. China has denounced the U.S. movement and has warned to take revenge.

It should be noted that the intensified political tensions will likely complicate the trade deal matters. As a consequence, the shared currency will likely struggle to pick up secure buying.

Economic Events to Watch Today

Let’s took at these fundamentals.

  

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing red and representing marginal declines, mainly due to renewed trade tension between the United States and China. As of writing, the currency pair currently trading at 1.1079, having hit a high level of 1.1094 in the overnight trading hours. For now, the breakout may remain elusive if the key U.S. data releases ignore expectations by a big range, which is scheduled to release on the day.

The EUR/USD currency pair surged 0.58% on Monday, confirming its most significant single-day rise since September 17. The sharp rise neutralized the immediate bearish setup but failed to draw stronger buying pressure, leaving the pair below the November 21 high of 1.1097. A close higher is needed to confirm a bullish breakout.

However, that seems complicated due to fading optimism regarding the trade deal between the United States and China. President Donald Trump said that he would likely delay a trade deal with China until after the 2020 presidential election.

The U.S. House of Representatives passed the Uighur Act, a bill to condemn the Chinese government for its mass internment of Uighur Muslims in Xinjiang. China has denounced the U.S. movement and has warned to take revenge.

It should be noted that the intensified political tensions will likely complicate the trade deal matters. As a consequence, the shared currency will likely struggle to pick up strong buying.

Daily Support and Resistance

  • S3 1.0883
  • S2 1.097
  • S1 1.1025

Pivot Point 1.1057

  • R1 1.1112
  • R2 1.1145
  • R3 1.1232

EUR/USD– Trading Tips

With an increased level of uncertainty, the dollar is getting weaker, which is why the EUR/USD is on hold despite entering the overbought zone. At the moment, the pair is holding right below a strong triple top resistance level of 1.1090, having formed a series of bullish and bearish candles. 

Below this level, we can expect a slight retracement in the EUR/USD until 1.1060 and 1.1038. Conversely, the bullish breakout can lead EUR/USD prices towards 1.1120.

GBP/USD– Daily Analysis

The GBP/USD currency pair hit the 6-week high and taking rounds to 1.3000 on the day, mainly due to recent polls raid chances of the ruling Conservatives Partys victory in December snap election. As of writing, the cable currency pair is currently trading at 1.2994 and consolidates in the range of 1.2992-1.3004 ahead of key data.

However, the recent polls that showed the reducing lead of the Tories against the opposition Labour Party, the recent survey from the YouGov and Kantar signal increased the popularity of the Converaitce Party. 

At the Sino-US front, the chances of the United States and China phase-one trade deal getting reduce day by day. The United States President recently warned the deal might happen till late-2020 while the U.S. House announced sanctions on the senior Chinese diplomats.

Additionally, the Independent’s news that Hundreds of protesters march to Buckingham Palace over the U.S. President Trump NHS fears might have exerted additional pressure on the trading sentiment. As a result, stocks in Asia and S&P 500 Futures keep in the red zone.

Today, the traders are preparing for the key U.K. Services Purchasing Managers’ Index (PMI), anticipated to continue unchanged at 48.6, as well as the U.S. Markit Services PMI and ISM Non-Manufacturing PMI. Whereas the U.S. Markit data could reprint 51.6 figure, it’s ISM counterpart might decline to 54.5 from 54.7. Moreover, the US ADP Employment Change, forecast 140K against 125K prior, will likely offer additional pressure on market watchers.

Daily Support and Resistance

  • S3 1.2823
  • S2 1.2876
  • S1 1.2908

Pivot Point 1.2929

  • R1 1.2961
  • R2 1.2982
  • R3 1.3035

GBP/USD– Trading Tip

The GBP/USD is trading outside of the normal trading range, which was extending resistance around 1.2956. Now the same level is likely to work as a support. Traders may look for bearish retracement below 1.3000 psychological trading levels, but later, buying can be seen above 1.2965.

USD/JPY – Daily Analysis

The USD/JPY currency pair came under pressure and hit the multi-day low of 108.65, mainly due to fading optimism of the United States and China trade deal, as in result kept the JPY strong in the wake of risk-off sentiment. As of writing, the USD/JPY currency pair consolidates in the range between the 108.48 – 108.67.

Looking forward, Japan’s Jibun Bank Services Purchasing Managers’ Index (PMI) for November, expected 50.4 against 49.7, is likely to offer fresh direction to the pair during initial Tokyo open. However, the trader’s eyes will be on this week’s U.S. employment data and trade war headlines for fresh impulse.

Because of the lack of major catalysts from Japan, Friday’s key monthly jobs report from the U.S. is now getting more attention. As a consequence, today’s ADP Employment Change for November, forecast 140K against 125K earlier, will be closely observed for fresh direction. 

Concerning Friday’s employment numbers, the headlines Nonfarm Payrolls (NFP) is expected to increase from 128K to 180K, whereas Unemployment Rate and Average Hour Earnings (YoY) will likely remain unchanged at 3.6% and 3.0% respectively.

    

Daily Support and Resistance

  • S3 107.65
  • S2 108.42
  • S1 108.7

Pivot Point 109.2

  • R1 109.48
  • R2 109.98
  • R3 110.76

USD/JPY – Trading Tips

The USD/JPY currency pair flashing green and hit the bullish level of 109.19 from the 5-day low despite the broad risk-off sentiment. As of writing, the pair is consolidating in the range between the 108.95 – 109.20.

At the moment, the USD/JPY is trading with a strong bearish bias, and we may see a bullish reversal in USD/JPY somewhere around 108.800 level today. Below this, the pair can go after 108.500 level.

On the technical side, the USD/JPY has shown a dramatic dip until 108.950, the 50% Fibonacci retracement level. The pair has violated the bullish channel, which was supporting the safe-haven pair around 109.350. 

All the best!

Categories
Crypto Videos

Cryptocurrency fundamental analysis part 1 – Finding Fundamental Sources

https://youtu.be/iqUX1LiRNtw

https://youtu.be/iqUX1LiRNtw

Crypto fundamental analysis part 1 – Finding Sources

Navigating the world of cryptocurrencies can be very difficult for a beginner due to the vast usage of tech jargon, as well as concepts that will almost certainly confuse you. Add to that the relative infancy of the technology, it can be extremely difficult even to find structured resources to learn from.
Importance of doing analysis by yourself
For traditional investments such as stocks, fundamental analysis requires you to evaluate the financial health and viability of a certain company according to its financial statements. If the numbers look good, it can be said with confidence that the company has good fundamentals. However, performing fundamental analysis for cryptocurrencies is quite different in every regard. There are no financial statements to evaluate, and everything has to do with the importance of the technology as well as the acceptance of the general public.


What’s different?

Cryptocurrencies are not companies. They are rather representations of value or assets within a certain network. The viability of a certain cryptocurrency is not based on it generating revenue, but rather directly on the community participation as users, miners, and developers.
The cryptocurrency space is still a young industry, which means that almost all of the cryptocurrencies are in development stages rather than finished products. Due to this, most cryptocurrencies have limited uses cases in the real world. This makes it even harder to perform fundamental analysis.

Fundamental analysis of cryptocurrencies must be performed differently than what’s traditionally done with stocks or other asset classes. It’s more important to engage in research to assess the viability and potential of the coins rather than what they are doing at the moment. A good understanding of a cryptocurrency’s fundamentals allows you to form opinions and stances, which are quite a rare occurrence in the world of cryptocurrencies.

How to find the right information

As an old saying goes: Knowledge is power. To assess a coin, we have to know where to get the information from first. Obtaining information about a cryptocurrency can be done in a couple of different ways:
Reading the whitepaper;
Checking out the cryptocurrency’s channels and blogs;
Checking out the cryptocurrency’s forums.

1. Cryptocurrency’s whitepaper

A whitepaper represents a detailed idea proposed by the development team. It outlines the purpose and mechanics of the cryptocurrency itself. A whitepaper represents the main source of evaluating the fundamentals of the coin. When performing fundamental analysis, you should always read the cryptocurrency’s whitepaper.
One thing that many people find as a drawback is the sheer technicality of the whitepaper itself. You have to understand quite a few concepts, mostly regarding finance and cyber-security, to read through the whitepaper easier.

2. Cryptocurrency’s channels and blogs

Channels and blogs represent the official and main channels of communication between the core development team and the general public. To do the fundamental analysis, you should take time to join a cryptocurrency’s Slack, Telegram, or Discord channel and see what the topics are there. Also, this is the place to ask questions and get more info on the project.
These channels are places where you can track the code updates that affect how a cryptocurrency is developing.

3. Cryptocurrency’s Community Forums

Forums are a great way to understand the cryptocurrency projects as well as the audience that follows it. This way, you can see the sentiments surrounding the project even better. This is also a great place to find simplified definitions of certain concepts as the community is usually well-informed.


The diversity of thoughts and different perspectives are never a bad thing as well, as they allow you to grasp the mechanics of the coin far better. If you’re not familiar with the technical jargon, many cryptocurrency projects have their “ELI5” articles on the forums. These articles try to “Explain it to me like I’m five years old,” which helps people that are not so much into cyber-security and programming in general.
The usual forums to look at would be Reddit, Bitcointalk, and Steemit.

Conclusion

All of the information about cryptocurrency projects is available online, and so are the opinions of other people. However, one should take time and investigate each potential investment by themselves as putting money on the line based on other people’s opinions is not a good investment strategy.

Categories
Forex Market Analysis

Daily F.X. Analysis, December 02 – Top Trade Setups In Forex – ISM Manufacturing PMI In Focus! 

The U.S. Dollar Index rose edged down to 98.27 from 98.33 during the previous week. The euro edged up 0.1% to $1.1015. Official data showed that November consumer prices in

The U.S. Dollar Index rose edged down to 98.27 from 98.33 during the previous week. The euro edged up 0.1% to $1.1015. Official data showed that November consumer prices in

The U.S. Dollar Index rose edged down to 98.27 from 98.33 during the previous week. The euro edged up 0.1% to $1.1015. Official data showed that November consumer prices in the eurozone increased 1.0% on year in November (+0.9% expected), and October jobless rate was at 7.5% (as expected, 7.6% in September). 

The U.S. stocks closed lower while ending November with the most significant monthly gain since June. The Dow Jones Industrial Average fell 112 points (-0.4%) to 28051, the S&P 500 lost 12 points (-0.4%) to 3140, and the Nasdaq Composite was down 39 points (-0.5%) to 8665.

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair hit the bearish track and continue to flashing red despite the positive China manufacturing data. As of writing, the EUR/USD currency pair currently trading near the 1.1018, representing slight declines on the day and consolidates in the range of 1.1015-1.1028.

The Caixin PMI, which surveys the small and medium-sized export-oriented units, increased to 51.8 in November from October’s 51.7 to record the fastest expansion in 3-3-years. While the official PMI released on Saturday also printed well above 50 to mark the first expansion in 13 months.

As in result, the risky assets getting bids due to data. For example, Japan’s Nikkei surged by1% in Asia, and the NZD/USD pair rose to a one-month high. Even so, the EUR currency is struggling.

Looking ahead, the EUR/USD currency pair may take bids if the European Central Bank (ECB) President Christine Lagarde’s pushes European leaders to boost spending, indirectly hinting low chances of more monetary stimulus in the foreseeable future. Notably, the Lagarde’s testimony is scheduled to happen at 14:00 GMT.

The market’s focus will shift to the U.S. data on the North American session. The US ISM Manufacturing PMI (Nov), due at 15:00 GMT, is forecasted to print at 49.4 against 48.3 in October. An above-50 print may put pressure on EUR/USD.

The final German and Eurozone PMI numbers scheduled to release in Europe may not have a big impact, unless they carry a significant upward or downward revisions to the preliminary figures released on November 22.

    

Daily Support and Resistance

  • S3 1.0915
  • S2 1.0962
  • S1 1.099

Pivot Point 1.1009

  • R1 1.1037
  • R2 1.1056
  • R3 1.1103

EUR/USD– Trading Tips

Traders are strengthening the downside bias amid positive NFP forecast, which is due to release later this week. The EUR/USD disrupted the tight trading range of 1.1016 – 1.0992 to trade near the 1.1020 trading level. 

At the moment, the EUR/USD’s now consolidating in a narrow trading range of 1.1030 – 1.1015. A bullish breakout of 1.1030 can lead the EUR/USD prices towards 1.1055, and on the lower side, 1.0985 endures the final support.

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing red and representing 0.10% losses. As of writing, the cable pair is currently trading at 1.2915 and consolidates in the narrow range between 1.29107 and 1.2918 at the start of the week, mainly due to series of United Kingdom election polls which doing limited to affect a leading Tory sentiment.

The GBP currency was seen stronger in the recent times in the wake of Brexit Party promising not to stand against the Tories in voters where there is a sitting Tory MP, underpinning the probability of a Tory majority after the quick threat of no-deal Brexit.

The investors are now keeping their eyes on the election outcomes. Still, the market will likely hold the risks of talks between the United Kingdom and the European Union, which may cover any quick bullish move in the GBP on a Tory victory.

At the Sino-US front, doubts over the phase-one deal between the United States (U.S.) and China are weighing on the greenback, whereas recently, actual activity data from China adds strength to the risk sentiment.

Looking forward, the market will keep their eyes on the U.S. main event in the U.S. nonfarm payroll jobs report. We expect employees to increase by 200k in November, after the above-consensus 128k October print.

All traders will keep their eyes on the trade and political headlines November month Purchasing Managers’ Index (PMI) data from the U.S., and the U.K. will likely offer intermediate moves. Including, U.K. Manufacturing PMI, anticipated 48.3, will be the first to observe ahead of the U.S. Markit and ISM activity indices. 

Estimates suggest the Markit PMI remain unchanged at 52.2, but ISM Manufacturing PMI may rise to 49.9 from 45.5.

Daily Support and Resistance

  • S3 1.2784
  • S2 1.285
  • S1 1.2889

Pivot Point 1.2917

  • R1 1.2955
  • R2 1.2984
  • R3 1.3051

GBP/USD– Trading Tips

The cable pair is currently trading at 1.2915 and consolidates in the narrow range between 1.29107 and 1.2918 at the origin of the week, mainly due to series of United Kingdom election polls which doing limited to affect a leading Tory sentiment.

On Friday, the GBP/USD continues to above the suggested support level of 1.2880. The pair has formed neutral candles above this level as traders are waiting for a fundamental reason to get in the market. 

On the 2-hour timeframe, the RSI and MACD are holding near 50 and 0, suggesting neutral bias among investors. Therefore, we may see a slightly bearish trend in the GBP/USD below 1.29400 area until a 38.2% Fibonacci retracement level of 1.2900. Consider staying bullish above 1.2900 today to target 1.2945/65. 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the 6-months high 109.70; this is the highest level since May 30, by the way, the safe-haven currency Japanese Yen came under pressure after the upbeat China manufacturing data and uptick in the United States equity index futures.

As of writing, the USD/JPY currency pair is currently trading at 109.70, the highest level since May 30, and the S&P 500 futures are reporting a 0.30% rise.

As we all well aware that President Donald Trump signed the Hong Kong Democracy Bill. China criticized the move because interference into its internal matters regarding Hong Kong, China warned to take revenge.

However, China did not take any revenge so far, and that may support the risk assets. Moreover, the data released over the weekend showed China’s manufacturing sector unexpectedly increased in November. The purchasing managers’ index (PMI) for China’s manufacturing sector inched up to 50.2 in November from 49.3 in October. A reading above 50 indicates expansion.

At the greenback front, the U.S. dollar stayed little changed on Monday in Asia after the release of reliable economic data in the U.S. the previous week. The U.S. Dollar Index traded marginally higher early in the day, up 0.03% to 98.20 by 8:41 PM ET (01:40 GMT).

Looking forward, the initial indications of a turnaround in the world’s 2nd-largest economy support further upside in the risk assets and the USD/JPY pair. The Caixin China manufacturing PMI, which focuses on the small and medium-sized export-oriented units, printed above the estimate of 51.5 soon before press time.

Meanwhile, the bullish movement will likely weaken if the focus shifts to the negative news regarding the United States and China trade talks because the report came earlier today that the optimism between the United States and China decreased about the phase-one deal.

    

Daily Support and Resistance

  • S3 108.98
  • S2 109.25
  • S1 109.38

Pivot Point 109.53

  • R1 109.65
  • R2 109.8
  • R3 110.07

USD/JPY – Trading Tips

The USD/JPY is consolidating at 109.425, and it has just begun to trade in the overbought zone as the RSI and MACD are stuck in the overbought territory. On the 4 hour graph, the USD/JPY has created a Doji and Spinning top, which typically implies chances neutral bias in the USD/JPY. On the downside, the USD/JPY may drop towards 38.2% Fibonacci retracement until 109.150. Besides Fibonacci, the bullish channel is also supporting the USD/JPY at the same level. So look for taking a sell trade below 109.700 today to target 109.200 and buying above 109.300 to target 109.700. 

All the best!

Categories
Forex Market Analysis

Daily F.X. Analysis, November 29 – Top Trade Setups In Forex – Brace for European Inflation Report! 

The U.S. dollar steadied against most major currencies on Thanksgiving day, with the ICE Dollar Index closing relatively unchanged on the day at 98.32. The euro edged up 0.1% to

The U.S. dollar steadied against most major currencies on Thanksgiving day, with the ICE Dollar Index closing relatively unchanged on the day at 98.32. The euro edged up 0.1% to

The U.S. dollar steadied against most major currencies on Thanksgiving day, with the ICE Dollar Index closing relatively unchanged on the day at 98.32. The euro edged up 0.1% to $1.1012. Official data showed that the eurozone’s Economic Confidence Index rose to 101.3 in November (101.0 expected) from 100.8 in October. Later today, November CPI (+0.9% on-year expected) and October jobless rate (steady at 7.5% expected) will be reported.

The German Federal Statistical Office will release November jobless rate (steady at 5.0% expected) and October retail sales (+0.2% on month expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair found on the bearish track and representing 1.27 decline on the monthly opening rate of 1.1151. As of writing, the currency pair is trading near 1.10.

The EUR/USD currency pair is moving bearish at the end of November, having surged 2.33% during October. So, that was the most significant monthly increase since January 2018. However, the currency pair has come under pressure, pouring cold water over the optimism generated by October’s 2.3% gain.

On the other hand, Consumer spending, as represented by retail sales, is anticipated to have increased at an annualized rate of 1.1% in October, having increased by 3.4% in the previous month. The retail sales data is scheduled to release at 07:00 GMT.

Meanwhile, the data due at 08:55 GMT is expected to show the economy added 5,000 jobs in November, and the unemployment rate continued steady at 5%. The Post-German data, the focus would shift to the Eurozone consumer price index and the jobless rate, scheduled for release at 10:00 GMT. 

The EUR currency may come under the selling pressure and hit the bearish track if the German jobs data disappoint expectation. As we know, Germany is already facing bearish pressure from the external sector. If the labor market cools sharply, the consumers will likely shift on the purse saving mood, leading to a deeper economic recession.

On the other side, the EUR/USD currency pair will likely find love if the key data crosses the forecast figures. Notably, the gains could be short-lived due to the United States and China trade tensions. As we all well aware that President Donald Trump signed the Hong Kong Democracy Bill earlier this week, irritating China. That could hurt the trade matters.

Daily Support and Resistance

    

  • S3 1.0958
  • S2 1.098
  • S1 1.099

Pivot Point 1.1002

  • R1 1.1012
  • R2 1.1024
  • R3 1.1046

EUR/USD– Trading Tips

The EUR currency outlined a sideways trading pattern, which is signifying neutral bias among traders, and that’s mostly due to the limited volatility ahead of the weekend. However, traders are strengthening the downside bias put forward by the lower high at 1.1097 established on November 21.  

The 14-day relative strength index is proposing bullish bias, but it’s directing lower now as it’s valued may cross below 50. Let’s look for bearish trades below 1.1020 level today to target 1.1099 and 1.0960.

GBP/USD– Daily Analysis

The GBP/USD currency pair is consolidating in the narrow range of 1.2910-1.2917. The pair got support from the polls showing continued fame of the ruling Conservative Party. Moreover, probably the reason behind the lack of more strength is the stepping back of the United Kingdom Prime Minister Boris Johnsons from certain debates.

After the YouGov’s poll of a clear lead of the ruling Tory Party over the opposition Labour Party, accusations on the United Kingdom Prime Minster raised as he stepped back from the debate on channel4 and is yet to confirm an interview with BBC’s Andrew Neil, as per the Independent. Whereas the opposition leaders have started using rude words and media support the reaction, probably due to this, they will lose their fame ere the December snap election.

The Conservative’s boss was recently criticized by the opposition Labour Party leader Jeremy Corbyn regarding selling the National Healthcare Systems (NHS) to the United States, citing leaked government papers. The decreasing chances of another strong poll supporting the Troy leadership and the greenback recovery are the major catalyst to drive trading volume in the GBP/USD pair.

So far, the market risk sentiment is still directionless, with the United States’ ten-year Treasury yields taking rounds to 1.77% with Asian equities flashing mixed signals.

Looking ahead, the half-day trading session in the U.S. and shortage of data and events will likely keep the market unactive. However, political and trade headlines will entertain the traders.

    

Daily Support and Resistance

  • S3 1.2698
  • S2 1.2794
  • S1 1.2857

Pivot Point 1.2891

  • R1 1.2954
  • R2 1.2987
  • R3 1.3083

GBP/USD– Trading Tips

On Friday, the GBP/USD continues to above the suggested support level of 1.2880. The pair has formed neutral candles above this level as traders are waiting for a fundamental reason to get in the market. 

On the 2-hour timeframe, the RSI and MACD are holding near 50 and 0, suggesting neutral bias among investors. Therefore, we may see a slightly bearish trend in the GBP/USD below 1.29400 area until a 38.2% Fibonacci retracement level of 1.2900. Consider staying bullish above 1.2900 today to target 1.2945/65. 

USD/JPY – Daily Analysis

 The USD/JPY currency pair is flashing red and hit the session low near the 109.46, having hit the high of 109.60 three hours ago. As of writing, the currency pair is consolidating in the day’s range of 109.47-109.59.

The USD/JPY currency pair is stepping back, possibly following the slow descent of the S&P 50 futures. The index futures were down 0.10% in early Asia and are currently reporting a 0.26 decline. Bank of Japan’s (BOJ) Governor Kuroda was out on the wires a few minutes before press time asking for structural changes. Kuroda told Parliament that structural reforms must accompany fiscal and monetary stimulus measures to heighten the economy’s long-term growth potential and added that the central bank’s ultra-loose policy is aimed at boosting inflation to 2% and not monetize debt. 

Governor Kuroda’s comments are not surprising because the central bank has little capacity to stimulate, having run an expansionary monetary policy for more than 6-years. 

Looking forward, the Japanese Yen will likely continue to gain ground, because equities may trade risk-averse in the wake of the decision by President Trump to sign the Hong Kong Democracy Bill. 


Daily Support and Resistance

  • S3 108.42
  • S2 108.92
  • S1 109.24

Pivot Point 109.42

  • R1 109.74
  • R2 109.93
  • R3 110.43

USD/JPY – Trading Tips

The USD/JPY is consolidating at 109.425, and it has just begun to trade in the overbought zone as the RSI and MACD are stuck in the overbought territory. On the 4 hour graph, the USD/JPY has created a Doji and Spinning top, which typically implies chances neutral bias in the USD/JPY.  

On the downside, the USD/JPY may drop towards 38.2% Fibonacci retracement until 109.150. Besides Fibonacci, the bullish channel is also supporting the USD/JPY at the same level. So look for taking a sell trade below 109.700 today to target 109.200 and buying above 109.300 to target 109.700. 

All the best!

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Forex Videos

Fundamental Analysis- The Full Sector Breakdown

https://youtu.be/6ISjrPJqm6U
Fundamental Analysis – Sector Breakdown
When trading currencies, which are always traded in pairs, you are effectively trading the economic worth of one country over another. And a

https://youtu.be/6ISjrPJqm6U
Fundamental Analysis – Sector Breakdown
When trading currencies, which are always traded in pairs, you are effectively trading the economic worth of one country over another. And a

Fundamental Analysis – Sector Breakdown

When trading currencies, which are always traded in pairs, you are effectively trading the economic worth of one country over another. And a country’s economic value is theoretically defined by its currency exchange rate. Although some currencies are also bought and sold based on supply and demand, and where certain currencies are also traded based on perceived market ‘risk-on’ and ‘risk-off’ events.
Therefore, in order to be an effective trader, you should have a good general knowledge and understanding of the economic situation pertaining to both countries within the pair you are trading.

Even though you might be planning to only trade currencies on a technical analysis basis, by having a good understanding of the economic state of both countries in the pair are you are trading, or thinking of trading, it will give you an overall edge if you are up to speed with the economic state of both of those countries. And this is why fundamental and technical analysis really do go hand in hand. Simply put, the more you know, and the more you understand, the more chance you will have of stacking the odds in your favor when it comes to pulling the trigger on your trades.

In order to gauge a country’s economy, we must first break it down into sectors.
The most important being gross domestic product or GDP, including factors that contribute to GDP, such as net trade exports, personal consumption, business investment, and government spending. In other words, it measures the total output of an economy.
Another sector would be the percentage of employment within the population, including cyclical and other fluctuations of unemployment and the relevant financial cost to the government thereof.


Another sector would be natural resources and technology, which lead to business creation and, more importantly, the exportation of these to other countries.
And other intellectual activities, including education and research, which all add value to a country’s economy in one form or another.
Cyclical sectors are also important components because they tend to have the effects of shrinking or expanding an economy during periods, and where one example might be the production of crops, where winter months plays a part in the reduction of harvests and associated production staff. Finance and credit fall into this sector too. Other areas include building materials, commodities exploration, and processing, banks and asset management, investment brokerage, insurance, property management, retailers, auto and auto parts, residential construction, restaurants, and entertainment.


The defensive sector reflects essential consumer needs such as healthcare, staple foods, which is virtually immune to economic developments. Telecoms would also fall into this bracket, especially as society becomes ever more reliant on the internet. Oil and gas producers, services and equipment, aerospace and defense firms, designers, and developers of computer operating systems and software firms fall into this area too.

Sensitive sectors fall between defensive and cyclical and are not immune or acutely affected by economic shifts. Here we would include real estate, Capital markets, the production of chemicals, and also commodities.
If GDP outlines the total output produced by an efficient economy, then the gross value added or GVA is the term used to highlight the performance of the individual sectors of an economy.
The breakdown of sectors is of particular interest to equity traders and especially fund managers who will often adjust their portfolios on a sector by sector basis. And while some Forex traders believe that the constant assessment of economic conditions within an economy will always be reflected in the current exchange rate of a particular currency pair, it is essential that traders analyze the contributions of the components of an economy – as best they can – in order to have at least an overview of how an economy is performing.
Here at Forex.Academy, we teach traders that you can never have too much knowledge when it comes to navigating the complex nature of the Forex market, and the significance and importance of recently released, and imminent economic data releases should never be underestimated.
It is also essential that traders have a reliable economic diary to hand and take note of key economic data releases because these are likely to be the times when volatility will increase.

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Forex Market Analysis

Daily F.X. Analysis, November 28 – Top Trade Setups In Forex – Happy Thanksgiving! 

The U.S. dollar kept trading within a tight range on Wednesday, amid thin trading before the Thanksgiving holiday. The ICE Dollar Index closed broadly flat on the day at 98.31.

The U.S. dollar kept trading within a tight range on Wednesday, amid thin trading before the Thanksgiving holiday. The ICE Dollar Index closed broadly flat on the day at 98.31.

The U.S. dollar kept trading within a tight range on Wednesday, amid thin trading before the Thanksgiving holiday. The ICE Dollar Index closed broadly flat on the day at 98.31.

The British pound rose 0.5% to $1.2930. A U.K. election poll showed that the Conservative would retain a majority of seats in the parliament. The euro fell 0.1% to $1.1005, while USD/JPY gained 0.3% to 109.38. 

The Federal Reserve released the Beige Book, which stated that economic activity expanded modestly, the outlook remains positive, and growth is expected to continue into next year. Besides, theU.S. economic data, third-quarter GDP growth was revised to 2.1% (1.9% expected and previously estimated), and durable goods orders increased 0.6% on month in October (-0.9% estimated).

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair consolidates on the uncertain track and may face a hard time defending crucial support until the German inflation data blows past predictions, weakening dovish ECB expectations. Today, the German inflation data is scheduled to release at 13:00 GMT.

As of writing, the EUR/USD currency pair seems set for a possible break below 1.0994, which is the 61.8% Fibonacci retracement of the rally from 1.0879 to 1.1179.

At the USD front, the greenback got the support mainly due to the 3rd-quarter gross domestic product was updated higher to 2.1% from 1.9%, in the wake of positive consumer spending data. The Fed’s preferred measure of inflation, which strips out volatile food and energy prices, soared higher to 2.1% from 1.9% in the 2nd-quarter. The inflation gauge exceeded an expectation of 1.7%.

It must be noted that the upbeat data of the U.S. may push the greenback further high on the day. Traders will be likely to sell dollars over increases uncertainty as President Trump’s decision to sign the Hong Kong Democratic Bill has irritated the Dragon Nation, and fears have increased regarding side effects on the trade deal. This is evident from the 0.25% drop in the S&P 500 futures seen at press time.

Looking forward, the breakdown will likely remain elusive manly if the preliminary German consumer price index for November crosses expectations by a considerable range, creating the opportunity for the European Central Bank head Christine Lagarde to maintain her neutral-to-hawkish stance for some time.

On the flip side, the CPI is anticipated to drop 0.6% month-on-month in November, having increased by 0.1% in October. The EUR/USD currency pair may plan a notable bounce from $1.10 if the inflation figure crosses estimates by a significant margin.


Daily Support and Resistance

  • S3 1.0958
  • S2 1.098
  • S1 1.099

Pivot Point 1.1002

  • R1 1.1012
  • R2 1.1024
  • R3 1.1046

EUR/USD– Trading Tips

On the technical side, the EUR currency charted a bearish engulfing candle yesterday, strengthening the downside bias put forward by the lower high at 1.1097 established on November 21. On the technical side, indicating the route of least resistance is to the bearish. The 14-day relative strength index is suggesting selling conditions with as the RSI value holds below 50, and the daily MACD histogram is again printing deeper bars below the zero line, a sign of strengthening bearish momentum. Let’s look for staying bullish above or bearish below 1.1000 level today to target 1.1055 on the upper side and 1.0985 on the lower side. 

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing green and hit the 4-day high to 1.2920, mainly due to the ruling Tory party, which will keep the helm of the United Kingdom with a vast majority. The YouGov Poll on the MRP model is highly appreciated for its forecasts regarding the United Kingdom’s result since they forecasted a suspended parliament in 2017. 

The poll suggests Conservatives gain 359 seats against the opposition Labour Party’s 211 seat estimate. Apart from this, It also shows that 43% of vote share will be allocated to the ruling Tories against Jeremy Corbyn-led Labour Party’s 32% expected share, which in turn indicates an 11-point lead of the Prime Minister (PM) Boris Johnson led Conservatives over the Labour Party.

On the other hand, the GBP/USD currency pair is found under pressure during the Asian session today. The GBP currency has initially fallen mainly due to expectations that the Tory announcement might leave a negative impact on the ruling party popularity ahead of the December Snap election. But now the GBP/USD is likely to find enough support below at the 1.2900 regions to bounce yet again. 

A report came from the Guardian’s journalist Owen Jones that the British Prime Minister Boris Johnson’s Conservatives have a significant majority over the Labour Party in the YouGov’s MRP poll.

Looking forward, the traders will just have limited data to trade as the United States enjoys thanksgiving holiday. Therefore, trade and political headlines will keep the market active.


Daily Support and Resistance

    

  • S3 1.2698
  • S2 1.2794
  • S1 1.2857

Pivot Point 1.2891

  • R1 1.2954
  • R2 1.2987
  • R3 1.3083

GBP/USD– Trading Tips

On Thursday, the GBP/USD has hit our previously suggested target level of 1.2880; in fact, it soared further to trade around 1.2940 level. Currently, the pair has entered the overbought zone, as we can see on the 2-hour timeframe, the RSI and MACD are holding near 70 suggesting chances of a bearish correction.

Therefore, we may see a slightly bearish trend in the GBP/USD below 1.29400 area until a 38.2% Fibonacci retracement level of 1.2900. Consider staying bullish above 1.2900 today to target 1.2945/65. 

 USD/JPY – Daily Analysis

The USD/JPY currency pair flashing red and dropped by 0.13% to 109.38, mainly due to fears regarding United States President Donald Trump’s decision to sign the Hong Kong bill. It may irritate China and could drop a negative impact on the trade talks. 

As a result, the safe-haven currency Japanese Yen has picked up buying. The USD/JPY pair is currently trading at 109.38, representing a 0.13% drop on the day. The pair has dropped more than 20 pips in the last 90 minutes or so. 

The U.S. President Trump signed the Hong Kong Human Rights and Democracy Act in early Asia, reaffirming support for Hong Kong’s pro-democracy protests after the majority of the City’s districts turned in favor of pro-democracy candidates with record voter turnout this week.

It must be noted that China has repeatedly warned the U.S. administration not to interfere in their internal affairs. Therefore, President Trump’s move will likely hurt the relationship with China at a time when both sides are trying to reach a “phase one” trade deal.

Looking forward, deeper declines could be in the offing if the Asian and European equities turn risk-averse concerning the latest political developments. 

At the USD front, the greenback found on the buying track during the United States trading hours on Wednesday, mainly due to official data, which showed the U.S. gross domestic product (GDP) increased 2.1% in the 3rd-quarter, driven by strong consumer spending. Notably, the pair hit a 6-month high of 109.61 before dropping on Trump’s decision to sign Hong Kong Democracy bill. 

Daily Support and Resistance

    

  • S3 108.42
  • S2 108.92
  • S1 109.24

Pivot Point 109.42

  • R1 109.74
  • R2 109.93
  • R3 110.43

USD/JPY – Trading Tips

The USD/JPY is trading at 109.425, and it has just entered the overbought zone as the RSI and MACD are stuck in the overbought territory. On the 4 hour chart, the USD/JPY has formed a tweezers top, which typically suggests chances of a bearish bias trend in the USD/JPY. 

On the downside, the USD/JPY may drop towards 38.2% Fibonacci retracement until 109.150. Besides Fibonacci, the bullish channel is also supporting the USD/JPY at the same level. So consider taking a sell trade below 109.500 today to target 109.200. 

All the best!

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 28 – Another bull rally despite China crypto-business crackdown

The cryptocurrency market had another great day. After a day of consolidation that the industry had yesterday, the past 24 hours have been quite bullish. Most cryptos ended up in

The cryptocurrency market had another great day. After a day of consolidation that the industry had yesterday, the past 24 hours have been quite bullish. Most cryptos ended up in

The cryptocurrency market had another great day. After a day of consolidation that the industry had yesterday, the past 24 hours have been quite bullish. Most cryptos ended up in the green, and some of them even broke their old key levels. If we take a look at today’s prices, Bitcoin went up %4.84, and it is now trading at $7,484. Ethereum gained 3.12%, while XRP went up 3.13%.

Of the top100 cryptocurrencies by market cap, the biggest gainer is Siacoin, with an explosive gain of 33.82% on the day. The biggest losers of the day were Silverway and Molecular Future, which lost 14.83% and 4.84% of their value, respectively.

 

The most recent jump in price was disproportional when we take into consideration all cryptocurrencies. Bitcoin’s dominance has increased more than 0.5% when compared to the value it had yesterday as it gained more value than the rest of cryptocurrencies. Its dominance is currently 66.52%.

The cryptocurrency market as a whole now has a market capitalization of $203.87 billion, which represents a significant increase when compared to the value it had yesterday.

What happened in the past 24 hours

China is showing its teeth with its latest crypto-crackdown. As reported, at least five local exchanges had to stop their operations or announce that they will no longer serve domestic users this month. Chinese regulators issued a series of warnings and notices as part of a cleanup of cryptocurrency trading.

The latest wave of shutdowns and restrictions in the crypto industry represent the biggest cleanup of the sector since September 2017.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin did not spend much time consolidating its price as the bulls seemed to have made a decision to move the price up. After consolidating above 7,000, the bulls pushed Bitcoin above $7,415. This move was successful and Bitcoin has now made this key level its support.


Bitcoin’s volume was on the levels it was at during the sell-offs, which happened a few days ago. Its RSI level is currently more near overbought than near oversold territory.

 

Key levels to the upside                   Key levels to the downside

1:  $8,000                                          1: $7,415

2: $8,425                                           2: $6,620

3: $8,640                                

Ethereum

Ethereum bulls also had their run but left Ethereum right on the key level of $153. Ethereum is now trying to decide whether its price will stay above this line or below it. However, whether the price ends up above or below $153, the bullish move was successful as this key level was not the only one that the price passed to the upside.


Ethereum’s RSI is now approaching overbought territory, while its volume has decreased heavily after the move has ended.

Key levels to the upside                    Key levels to the downside

1: $167.8                                            1: $127

2: $178.6

3: $185

XRP

XRP was another cryptocurrency that had a bull rally in the past 24 hours. However, its price is still not stable enough that we can say that this move was completely successful. After consolidating at around $0.21, XRP’s price shot up to $0.227 it is now trading at. However, with no key resistance levels broken and no real support levels formed, this move hasn’t brought XRP out of the limbo yet.


XRP’s RSI is slowly increasing while its volume is declining slightly.

Key levels to the upside                   Key levels to the downside

1: $0.235                                           1:  $0.202

2: $0.245

3: $0.266

Categories
Forex Market Analysis

Daily F.X. Analysis, November 27 – Top Trade Setups In Forex – U.S. GDP In Play! 

The U.S. Dollar Index was little changed on Tuesday, closing relatively flat on the day at 98.25. The euro gained 0.1% to $1.1022. The German GfK Consumer Confidence Index edged

The U.S. Dollar Index was little changed on Tuesday, closing relatively flat on the day at 98.25. The euro gained 0.1% to $1.1022. The German GfK Consumer Confidence Index edged

The U.S. Dollar Index was little changed on Tuesday, closing relatively flat on the day at 98.25. The euro gained 0.1% to $1.1022. The German GfK Consumer Confidence Index edged up to 9.7 in December (9.6 expected and in November).

On the fundamental’s front, the Conference Board Consumer Confidence Index plunged to 125.5 in November (127.0 expected) from 126.1 in October. Wholesale inventories rose 0.2% on month in October (as expected), while new home sales fell to an annualized rate of 733,000 units (705,000 units estimated) from 738,000 units in September. Let’s took at today’s trade setups. 

Economic Events to Watch Today

Let’s took at these fundamentals.

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing red and hit the record lows to trade below the seven months lows. At the moment, the currency pair is currently trading at 1.1015.

The reason behind decreased uncertainty could be the recent progress in the United States and China trade deal, which is likely to resolve issues. 

For now, the focus is likely to be on the U.S. data Q3 GDP, Personal Spending (Oct), Durable Goods Orders (Oct), Weekly Jobless Claims. The 3rd-quarter annualized GDP is forecasted to be unchanged at 1.9%. The economy increased by 2% and 3.1% in the 2nd and the 1st quarter as well.

With that being said, a prolonged period of low volatility often paves the way for a big move on either side. The level of uncertainty will drop if both nations reach a trade agreement. This ultimately can drive a significant drop in the common currency against the U.S. dollar. 

Daily Support and Resistance

  • S3 1.0959
  • S2 1.0988
  • S1 1.1001
  • Pivot Point 1.1017
  • R1 1.103
  • R2 1.1045
  • R3 1.1074

EUR/USD– Trading Tips

On the technical side, indicating the route of least resistance is to the bearish. The 14-day relative strength index is suggesting selling conditions with as the RSI value holds below 50, and the daily MACD histogram is again printing deeper bars below the zero line, a sign of strengthening bearish momentum. The double bottom pattern on the 4-hour chart is extending support to the direct currency pair. Let’s look for staying bullish above or bearish below 1.1000 level today to target 1.1055 on the upper side and 1.0985 on the lower side. 

GBP/USD– Daily Analysis

The GBP/USD currency pair found on the bearish track and still on the backfoot while dropping 1.2850, mainly due to showing depreciation in the ruling Conservative Party lead. The greenback strength leaves a negative impact on the GBP/USD currency pair.

The Tory announcement is already under criticism for its lack of defense, failure to mention promises on the National Healthcare System (NHS), and Brexit’s deadline is keeping the political depression for the ruling party. The Independent says that former senior judge blames the United Kingdom’s (U.K.) ‘s current Prime Minister for his reckless private life.

On the other hand, the United States President Donald Trump continues its hopes of a phase-one deal with China even after the media releases from Beijing that blamed the U.S. for unfair behavior. The greenback stays on the bullish track across the board because investors still trust the U.S. dollar during the risk-on sentiment.

For now, there is no significant data and event is scheduled to release from the United Kingdom, the United States economic calendar is full of critical figures ranging from the 2nd-version on 3rd-quarter (Q3) Gross Domestic Product (GDP) to October month Durable Goods Orders. The markets will keep their eyes on the U.S. Personnel Income and Spending, coupled with the Core Personal Consumption Expenditure Index.

Ahead of the data, T.D. Securities anticipates the Core PCE to stay around 0.7% YoY whereas also expecting Durable Goods Orders to recover to -1.0%.

Daily Support and Resistance

  • S3 1.2748
  • S2 1.2818
  • S1 1.2859
  • Pivot Point 1.2887
  • R1 1.2928
  • R2 1.2956
  • R3 1.3025

GBP/USD– Trading Tips

On Wednesday, the GBP/USD is now heading lower to test the triple bottom support area of 1.2820. The cable seems to close a tweezers bottom pattern on the 2-hour chart, which is famous for driving a bullish trend in the market. So here we can expect GBP/USD to trade bullish above 1.2820 to target 1.2880 later today. 

 

USD/JPY – Daily Analysis

The USD/JPY currency pair found on the bullish track, extending its recent recovery rally. As of writing, the currency pair currently trading at 109.15. The USD/JPY pair hit the two-weeks high during the Asian session mainly due to the positive headlines which came out from the United States and China regarding trade deal.

The pair closed beyond 200-day Simple Moving Average (SMA) for the first time since early November because the market’s risk sentiment further improved. Traders, the primary reason behind such a drop in uncertainty is increasing expectations that the United States (U.S.) and China will soon sign an initial, or phase-one, trade deal.

Elsewhere, the new trade headlines came from the United States President Donald Trump that we are very close to making a deal with China. The South China Morning Post’s (SCMP) story highlights the Commerce Secretary’s order to protect telecommunication networks and their supply chains from national security warnings. Though, the same fails to get much of the attention.

At the Fed front, the positive comments from the Federal Reserve (Fed) Chairman Jerome Powell and Governor Lael Brainard also supported the USD/JPY currency pair. Notably, the Federal Reserve (Fed) Chairman Jerome Powell praised the current economic status and the present monetary policy, whereas Governor Brainard said that the economic risk outlook still weak, but the sentiment seems to be improving. 

Traders did not give much focus on the comment from the President of the Federal Reserve bank of Dallas, Robert Kaplan, that the United States economy has a good opportunity to grow by 25 in the coming year. Still, unfortunately, the growth in the 4th-quarter is going to be weak.

The 2nd version of the 3rd-quarter US Gross Domestic Product (GDP) and October month Durable Goods Orders will be closely observed in the U.S. economic calendar as well as the comments from the Bank of Joana board member Makoto Sakurai, and trade headlines can be kept for intermediate direction.

Daily Support and Resistance

  • R3: 109.38
  • R2: 109
  • R1: 108.77
  • Pivot Point 108.61
  • S1: 108.39
  • S2: 108.23
  • S3: 107.84

USD/JPY – Trading Tips

The USD/JPY is trading at 109.100, and it has just violated the horizontal resistance area of 109. The closings of bullish candles above 109 mark are suggesting further buying until 109.300 and 109.450. Besides, the MACD and RSI are still holding in the bullish zone. Consider taking buying trades over 109 to target 109.35 today. 

All the best!

Categories
Forex Market Analysis

Daily FX Brief, November 26 – Major Trade Setups – Stronger Dollar Rules the Market

The U.S. Dollar Index rose 0.3% on the day to 98.27, lifted by stronger-than-expected U.S. economic data. The euro slid 0.3% to $1.1024. The Markit eurozone Manufacturing PMI posted 46.6

The U.S. Dollar Index rose 0.3% on the day to 98.27, lifted by stronger-than-expected U.S. economic data. The euro slid 0.3% to $1.1024. The Markit eurozone Manufacturing PMI posted 46.6

The U.S. Dollar Index rose 0.3% on the day to 98.27, lifted by stronger-than-expected U.S. economic data. The euro slid 0.3% to $1.1024. The Markit eurozone Manufacturing PMI posted 46.6 in November (46.4 expected, 45.9 in October), while Services PMI declined to 51.5 (52.4 expected) from 52.2.

The sentiment was lifted after Chinese President Xi Jinping called for Beijing and Washington to strengthen communications.

Regarding U.S. economic data, the Markit U.S. Manufacturing Purchasing Managers’ Index (preliminary reading) posted 52.2 in November (51.4 expected, 51.3 in October). The University of Michigan Consumer Sentiment Index (final reading) came in at 96.8 (95.7 expected).

Economic Events to Watch Today

Let’s took at these fundamentals.

EUR/USD – Daily Analysis

The EUR/USD currency pair looking flat and consolidates in the narrow range of 1.1012 / 1.1016. Looking forward, this pair will likely hit the 4-day winning rally mainly due to the hints came regarding a rate cut from the Federal Reserve President Jerome Powell on Monday that interest rates are unlikely to increase anytime soon.

Notably, Powell’s comments indicate the Federal Reserve is likely to hold rates steady for some time until the inflation spikes well above 2 percent.

Therefore, the markets will likely offer the greenback and supporting the EUR/USD currency pairs to hit the bullish level for the first time after November 19. As we know, the currency pair found oo the bearish track yesterday to confirm the 4th-consecutive daily decline.

While Powell’s comments may weigh over the U.S. dollar, the upside in the common currency looks limited, courtesy of weaker Eurozone and German PMIs released last Friday.

Whereas on the other hand, the Federal Reserve President Jerome Powell’s comments could leave the pressure on the greenback, the bullish move in the EUR currency looks limited in the wake of weaker Eurozone and the German PMIs released last Friday.

At the Sino-US front, the report came that the United States and China have reached on the solving trade deal and reduced the risk appetite sentiment in the market. That is visible from the flat action in the Chinese Yuan and the Australian dollar currency. Whereas, the futures on the S&P 500 are also trading in a sideways manner. 

    

Daily Support and Resistance

S3 1.1036

S2 1.1056

S1 1.1067

Pivot Point 1.1076

R1 1.1087

R2 1.1095

R3 1.1115

EUR/USD– Trading Tips

The EUR/USD traded as we forecast to drop to 1.1010 level after forming a bearish hammer candle during the previous week. For the moment, the EUR/USD is trading at 1.1020 level and has developed a bullish engulfing pattern on the 2-hour chart. It’s suggesting strong chances of a bullish reversal until 1.1040 and 1.1060 the 38.2% and 61.8% Fibonacci resistance areas. Let’s consider staying bullish above 1.1015 level today to target 1.1060. 

GBP/USD– Daily Analysis

The GBP/USD currency pair sidelined and consolidates in the narrow range near the 1.2900 mainly due to traders takes clues from the trade news and Federal Reserve Chairman Jerome Powell diverting markets attention off from the United Kingdoms matters.

At the Sino-US front, the report came that the official from the United States and China discussed the multiple ways to resolve the trade deal matter over the phone call raised the chances of the phase-1 deal between the world’s biggest nations. Traders are ignoring the rising uncertainty regarding the 2nd-phase deal.

Moreover, the United States Federal Reserve Chairman Jerome Powell crossed wires while delivering the speech at the Providence Chamber of Commerce Annual Meeting in Rhode Island. The Fed avoided giving any fresh hints regarding future monetary policy. By the way, his positive preference for household spending ruled out the negative comments regarding global trade and jobs increase.

As well as, the greenback increases its recent rally, whereas the risk sentiment stays almost positive due to the United States’ 10-year treasury yields and major stock indices.

In the United Kingdom (U.K.), the ruling Conservatives and the opposition parties are at each other after the Tory leader, Boris Johnson, released the party’s announcement during the weekend. Whereas the Labour Party is struggling to detect mistakes in the Tory promises, ordering from National Healthcare System (NHS) to Defence, the Liberal Democrats (LibDems) doubts the Prime Minister (PM) Boris Johnson led to party’s ability to offer smooth Brexit before the Christmas.

There is no significant data and event for decorating the economic calendar, so the traders will keep their eyes on the U.S. catalysts to plan near-term trading bias. Moreover, the 2nd-tier housing and manufacturing data will join Consumer Confidence and speech from the Fed Governor Lael Brainard.

Daily Support and Resistance

S3 1.2651

S2 1.2756

S1 1.2794

Pivot Point 1.2862

R1 1.29

R2 1.2967

R3 1.3073

GBP/USD– Trading Tips

On Tuesday, the GBP/USD has opened higher to 1.2865 following a massive fall to 1.2822 on Friday, which would yield consolidation ahead of another bearish wave from 1.2985 extends to 1.2775. Lets us reckon Nov’s low of 1.2769 as it supports the GBP/USD around the same level if 1.2825 level gets violated. Consider staying bearish below 1.2875 level today to target 1.2825 

 

USD/JPY – Daily Analysis

The USD/JPY closed at 108.917 after placing a high of 108.975 and a low of 108.596. Overall the movement for USD/JPY remained Bullish that day.

China said on Sunday that it would seek to improve protections for intellectual property rights, including raising the upper limits for compensation for rights violations. 

China rolled out plans to strengthen its rules on copyrights, patents, and trademarks. This subject has been one core sticking point in more than a year of trade negotiations with the United States.

It was reported that by 2022, China would be making progress in issues that have affected intellectual property rights enforcement, such as low compensation, high costs, and the difficulty of proof. And that a better system of protection should be placed by 2025.

The rules around Intellectual property rights have been a major complaint against China and have been boosting the dispute between the most significant economies from the year. It was reported by US International trade Administration in 2018 that the estimated Intellectual Property theft has cost American businesses up to $600 billion a year.

The unauthorized access to a wide range of commercially valuable business information, technical data, trade secrets, and proprietary internal communications by the Chinese Government has been a burden on US commerce. In response to this, the need to address intellectual property rules came out against China by Trump administration, which led to increased tariffs on thousands of products and cast uncertainty on business activity across the globe.


Daily Support and Resistance

R3: 109.38

R2: 109

R1: 108.77

Pivot Point 108.61

S1: 108.39

S2: 108.23

S3: 107.84

USD/JPY – Trading Tips

The USD/JPY is trading at 108.700, and it has just violated the triple top resistance area of 108.600. The closings of bullish candles above 108.600 level are extending support to the safe-haven currency USD/JPY. With this, the market opens further room for buying until 109.090 for the USD/JPY pair. Besides, the MACD and RSI are still holding in the bullish zone. Consider taking buying trades over 108.650 to target 109 today. 

All the best!

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Forex Market Analysis

Daily FX Brief, November 25 – Major Trade Setups – Stronger Dollar In Play! 

The U.S. Dollar Index rose 0.3% on the day to 98.27, lifted by stronger-than-expected U.S. economic data. The euro slid 0.3% to $1.1024. The Markit eurozone Manufacturing PMI posted 46.6

The U.S. Dollar Index rose 0.3% on the day to 98.27, lifted by stronger-than-expected U.S. economic data. The euro slid 0.3% to $1.1024. The Markit eurozone Manufacturing PMI posted 46.6

The U.S. Dollar Index rose 0.3% on the day to 98.27, lifted by stronger-than-expected U.S. economic data. The euro slid 0.3% to $1.1024. The Markit eurozone Manufacturing PMI posted 46.6 in November (46.4 expected, 45.9 in October), while Services PMI declined to 51.5 (52.4 expected) from 52.2.

The sentiment was lifted after Chinese President Xi Jinping called for Beijing and Washington to strengthen communications.

Regarding U.S. economic data, the Markit U.S. Manufacturing Purchasing Managers’ Index (preliminary reading) posted 52.2 in November (51.4 expected, 51.3 in October). The University of Michigan Consumer Sentiment Index (final reading) came in at 96.8 (95.7 expected).

  

Economic Events to Watch Today

Let’s took at these fundamentals.

 

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing red and will likely hit the bearish level below 1.10 on the day if the German IFO data ignore expectations. 

As of writing, the EUR/USD currency pair dropped from 1.1058 to 1.1014. At the end of the week, the EUR/USD was seen trading as a bearish at 1.1097, in the wake of mixed German PMIs and the dismal Eurozone PMIs. It should be noted that European Central Banks President Christianne Lagarde said the global economic uncertainty is high and asked for a fiscal boost, as required.

The recent bearish high setup will likely retest of 1.10. The pairs bearish sentiment is likely to be stronger due to the fading United States and China’s optimism. Whereas the United States and China phase-one trade deal seems not to happen soon, by the way, both nations struggling to reach on a positive outcome. Notably, the German economy has paid a heavy price for the year-long trade tensions.

The greenback found on the bullish track in the wake of unexpectedly better U.S. Markit PMIs and a bullish revision to the University of Michigan consumer sentiment.

According to the situation, there are very low reasons for the shared currency traders to take a buying under the single currency on the day, and the support at 1.10 will be likely to be failed if the German IFOs miss expectations, which is scheduled to release 09:00 GMT.

That German economy is suffering recession risk is generally accepted by now. So, the forward-looking IFO – Expectations (Nov) index will take priority over the Business Climate and the Current Assessment number. The Expectation index is seen reading at 92.5 against 91.5 in October.

Daily Support and Resistance

S3 1.0894

S2 1.0967

S1 1.0993

Pivot Point 1.104

R1 1.1066

R2 1.1113

R3 1.1187

EUR/USD– Trading Tips

The EUR/USD traded as we forecast to drop to 1.1010 level after forming a bearish hammer candle during the previous week. For the moment, the EUR/USD is trading at 1.1020 level and has developed a bullish engulfing pattern on the 2-hour chart. It’s suggesting strong chances of a bullish reversal until 1.1040 and 1.1060 the 38.2% and 61.8% Fibonacci resistance areas. Let’s consider staying bullish above 1.1015 level today to target 1.1050. 

GBP/USD– Daily Analysis

The GBP/USD currency pair found on the bearish track and currently trading at 1.2850. The Cable pair got the support from the polls showing a hike in Tory support for the December snap election before losing ground due to doubts arising from the ruling party’s latest announcement.

During the weekend, the United Kingdom Prime Minister Boris Johnson released the ruling Conservative Party’s announcement that offers many austerity measures apart from smooth Brexit. Notably, the party’s commitments regarding a National Healthcare System (NHS) budget by £33.9 billion by 2023-24, an offer of 50,000 nurses and not to increase rates of income tax, national insurance or VAT till the next five years took significant attention.

However, the latest series of polls keep the Conservatives at the front seat with more than 10% points of a lead over other parties.

The GBP/USD currency pair was found on the strong bearish track on Friday, mainly due to preliminary figures of activity number keep portraying the markets Brexit fears. On the other side,

the same conflicts with the United States statistic that kept the U.S. dollar.

At the greenback front, the strong buying in the greenback came mainly due to optimism surrounding the United States and China trade deal after the United States President Donald Trump said that the trade deal with China is very close. Although the confidence remains under check with the Donald Trump administration’s willingness to take a good look at the Hong Kong bill, which in turn could resume the conflict between the U.S. and China, whereas also negatively affecting the trade negotiations.

The United Kingdom CBI Distributive Trade Survey and the United States Chicago Federal Reserve National Activity Index, as well as the US Dallas Fed Manufacturing Index, will keep under the spotlight. Moreover, the market will keep their eyes on the trade and political headlines for fresh impulse.

Daily Support and Resistance

S3 1.2651

S2 1.2756

S1 1.2794

Pivot Point 1.2862

R1 1.29

R2 1.2967

R3 1.3073

GBP/USD– Trading Tips

On Monday, the GBP/USD has opened higher to 1.2865 following a massive fall to 1.2822 on Friday, which would yield consolidation ahead of another bearish wave from 1.2985 extends to 1.2775. 

Lets us reckon Nov’s low of 1.2769 as it supports the GBP/USD around the same level if 1.2825 level gets violated. Consider staying bearish below 1.2895 level today. 

 

USD/JPY – Daily Analysis

The USD/JPY currency pair is flashing green and found on the bullish track despite few headlines during the weekend regarding geopolitical themes that have kept markets on alert. At of writing, the USD/JPY currency pair is currently trading at 108.66 and consolidates in the narrow range of 108.63 and 108.69.

The market’s focus, as described in this week’s Asia open. Recap of latest progress as risk-on tones appear with trade wars and Brexit. The fresh news is slightly more favorable for risk appetite, possibly reducing the Japanese yen’s progress for the time being with USD/JPY moving between 108.48 and 108.76 on Friday.

Meanwhile, the U.S. dollar is bid on its right after dome promising data from Friday. U.S. November flash Markit PMIs contrasted with the European and U.K.’s releases, beating expectations manufacturing climbed to 51.6 (vs. est. 51.0, prior 50.6), and services rose to 52.5 (est. 51.4, prior 51.3).

For the U.S. calendar, we have the Producer Price Index and Consumer Price Index data, which analysts at T.D. Securities said suggest core PCE inflation could remain steady at 1.7% YoY in October, even after a notable MoM increase in healthcare prices. On the other hand, headline PCE likely rose a tenth to 1.4% YoY. Separately, we expect personal spending to advance 0.2% MoM for a 3rd-consecutive month in October, with a firm increase in services spending leading the upside.

Daily Support and Resistance

S3 108.11

S2 108.37

S1 108.51

Pivot Point 108.62

R1 108.77

R2 108.88

R3 109.13

USD/JPY – Trading Tips

The USD/JPY is trading at 108.700, and it has just violated the triple top resistance area of 108.600. The closings of bullish candles above 108.600 level are extending support to the safe-haven currency USD/JPY. With this, the market opens further room for buying until 109.090 for the USD/JPY pair. Besides, the MACD and RSI are still holding in the bullish zone. 

Consider taking buying trades over 108.650 to target 109 today. 

All the best!