Tag: Fundamental Analysis

AUD/USD Upward Channel In-Play – Brace for a Buying Trend!

Post author By Ali B.
Post date 7 December, 2020
No Comments on AUD/USD Upward Channel In-Play – Brace for a Buying Trend!

The AUD/USD closed at 0.74260 after placing a high of 0.74435 and a low of 0.74100. After rising for three consecutive days, the AUD/USD pair dropped on Friday and posted small losses as it remained confined in a range between 0.74100 and 0.74400. The currency pair rose in the early trading session on Friday as it followed the previous day’s trend and because of the Australian side’s supportive economic data. Another factor involved in the rising AUD/USD prices in the early trading session was the improved risk-sentiment from the latest development in the coronavirus vaccine.

The approval for emergency use authorization to Pfizer and BioNtech added in the risk sentiment as the hopes for global economic recovery increased and supported the risk-sensitive Aussie. The strong Australian dollar pushed the AUD/USD pair higher in early trading hours on Friday. On the data front, at 05:30 GMT, the Retail Sales from Australia raised to 1.4% against the projected 0.5% and supported the Australian dollar, and capped further losses in AUD/USD pair.

From the US side, at 18:30 GMT, the Average Hourly Earnings rose to 0.3% against the expected 0.1% and supported the US dollar and added pressure on AUD/USD pair. The Non-Farm Employment Change fell to 245K against the expected 480K and weighed on the US dollar, and capped further losses in AUD/USD pair. The Unemployment Rate fell to 6.7% against the expected 6.8% and supported the US dollar. The Trade Balance from the US came in as -63.1B against the expected -64.7B and supported the US dollar. At 20:00 GMT, the Factory Orders for November rose to 1.0% against the expected 0.8% and supported US Dollar and added pressure on AUD/USD pair.

Despite the US’s disappointing Job report, the unemployment rate and factory order data managed to support the US dollar through the rough time and exerted downward pressure on AUD/USD pair. Meanwhile, the AUD/USD pair’s losses were also limited because of the underlying pressure on the US dollar after the agreement between Democrats and Republicans over the $908 billion stimulus package. The agreement on the bipartisan proposal added hopes that a massive stimulus could also be approved and weighed on the US dollar that kept the losses in AUD/USD pair limited on Friday.

Daily Technical Levels

Support Resistance

0.7407 0.7461

0.7376 0.7482

0.7354 0.7514

Pivot point: 0.7429

The AUD/USD slipped to trade at 0.7372 level, holding above an upward support level, which is extended by an upward channel. The AUD/USD channel may drive upward movement until 0.7405 and 0.7440 resistance levels on the higher side. Conversely, a bearish breakout of 0.7372 level can extend the selling trend until the next support level of 0.7337. The RSI and MACD are reporting selling bias in the pair. Good luck!

Tags AUD/USD, Daily Support and Resistance, Fundamental Analysis, Support and Resistance, Technical Analysis

Forex Market Analysis

Daily F.X. Analysis, December 07 – Top Trade Setups In Forex – Eyes on European Events!

Post author By Ali B.
Post date 7 December, 2020
No Comments on Daily F.X. Analysis, December 07 – Top Trade Setups In Forex – Eyes on European Events!

The calendar is a bit muted today, and the market can exabit thin trading volume on the news front. However, the focus can stay on German Industrial Production m/m and Sentix Investor Confidence from the Eurozone, which are expected to perform better than the previous month and may underpin the Euro currency. Besides, the U.K. Halifax HPI m/m will also play a slight role in determining the GBP trend, while economists expect HPI to improve from 0.3% to 0.6% this month.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.21185 after placing a high of 1.21772 and a low of 1.21101. After rising for three consecutive days, the EUR/USD pair dropped on Friday after the initial rally. The downfall in EUR/USD pair on the day came in after U.S. job figures’ release.

In the trading session on Friday, the EUR/USD pair rallied slightly on the back of improved risk sentiment and the U.S. dollar’s weakness. The risk perceived EUR/USD followed the optimism regarding the coronavirus vaccine and moved higher in the early trading session on Friday. Besides, the U.S. dollar’s weakness due to the increased spread of coronavirus and hospitalization rate in the U.S. also added strength to the rising EUR/USD pair.

The U.S. dollar was also weak due to increased hopes for the next round of U.S. stimulus package after the CARES Act passed in March. Democrats and Republicans have agreed over a $908 billion stimulus package, and the expectations have increased that a big stimulus will also be delivered soon. The weak U.S. dollar gave a Pushto EUR/USD pair on Friday and raised its prices above the 1.21700 level.

However, the EUR/USD pair’s gains started to reverse and converted into losses after the release of macroeconomic data from the U.S.

At 12:00 GMT, the German Factory Orders for November raised to 2.9% against the expected 1.4% and supported Euro. At 12:45 GMT, the French Gov Budget Balance came in as -159.9B. At 14:00 GMT, the Italian Retail Sales raised to 0.6% against the forecasted 0.2% and supported Euro.

At 18:30 GMT, the Average Hourly Earnings rose to 0.3% against the anticipated 0.1% and supported the U.S. dollar and added pressure on EUR/USD. The Non-Farm Employment Change declined to 245K against the anticipated 480K and weighed on the U.S. dollar.

The Unemployment Rate declined to 6.7% against the anticipated 6.8% and supported the U.S. dollar and dragged the EUR/USD pair. The Trade Balance from the U.S. came in as -63.1B against the anticipated -64.7B and supported the U.S. dollar and weighed on EUR/USD pair. At 20:00 GMT, the Factory Orders for November raised to 1.0% against the anticipated 0.8% and supported U.S. Dollar. Most of the U.S. data came in support of the U.S. dollar that resulted in the EUR/USD pair’s downfall on Friday in the late trading session.

Daily Technical Levels

Support Resistance

1.2101 1.2178

1.2063 1.2215

1.2025 1.2254

Pivot point: 1.2139

EUR/USD– Trading Tip

On Monday, the EUR/USD continues to trade sideways amid mixed NFP figures released on Friday. On the higher side, the EUR/USD may find an immediate resistance at 1.2160 and 1.2196 level. While the closing of candles below the 1.2103 level can send the EUR/USD pair further lower until 1.2080 and 1.2040 level. The MACD is strongly bearish; therefore, the idea will be to open a sell trade below the 1.2175 level today to capture quick green pips.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.3413 after a high of 1.35390 and a low of 1.34096. The GBP/USD pair rose to its highest level since May 2018 in the early trading session on Friday over the combined factor of Brexit optimism and the weakness of the U.S. dollar. However, the British Pound cut its gains after the E.U.’s Brexit negotiator Michel Barnier paused the talks.

During the early trading session on Friday, the GBP/USD pair rose and started to post gains following the Brexit optimism triggered after the agreement was reached over the Fisheries between the U.K. and the E.U. Another factor involved in the GBP/USD pair’s upward momentum was the U.S. dollar’s weakness.

The U.S. dollar index (DXY) that measures the value of the U.S. dollar against the basket of six currencies fell to its six years, the lowest level of 90.47 on Friday. The losses in DXY were due to a combination of factors, including the rising number of coronavirus in the nation and the rising expectations of the U.S. stimulus package.

The number of new coronavirus cases in the past five days in the U.S. reached about 1 million. The hospitalization rate also increased to an alarming level and hit a record high after 101,487 patients were reported to be hospitalized in a single day. This negative news from the U.S. added further pressure on the U.S. dollar and supported the upward trend in the GBP/USD pair in the early trading session on Friday.

British Pound was under demand on Thursday after the U.K. and E.U. reported that they had reached an agreement over one key sticking issue of Fisheries. Investors started to buy GBP/USD in the early trading session on Friday as they continued following the previous trend.

However, the currency pair GBP/USD pair started to decline on Friday after the release of U.S. macroeconomic data and the announcement from Michel Barnier. The E.U. Brexit negotiator, Michel Barnier, said that he had paused the trade talks with the U.K. and added that the conditions for a deal had not yet been met.

After one week of intensive negotiations in London, the U.K. and E.U. agreed to pause talks because the post-Brexit deal conditions were not met. Barnier said that E.U. Commission president Ursula von der Leyen and PM Boris Johson would try to make progress on a deal in the next meeting that will take place on Saturday.

After these comments by the E.U. top negotiator, the earlier optimism that the deal was imminent could be reached before the end of the week. These updates suggested that talks have reached a very critical stage, and anything could happen. It raised the market’s uncertainty and supported the safe-haven greenback that exerted pressure on GBP/USD pair.

On the data front, at 14:30 GMT, the Construction PMI from Great Britain raised to 54.7 against the projected 52.3 and supported British Pound and limited the losses in GBP/USD pair.

From the U.S. side, at 18:30 GMT, the Average Hourly Earnings surged to 0.3% against the projected 0.1% and supported the U.S. dollar and added losses in GBP/USD pair. The Non-Farm Employment Change fell to 245K against the projected 480K and weighed on the U.S. dollar. The Unemployment Rate fell to 6.7% against the projected 6.8%, supported the U.S. dollar, and dragged GBP/USD pair. The Trade Balance from the U.S. came in as -63.1B against the projected -64.7B and supported the U.S. dollar. At 20:00 GMT, the Factory Orders for November surged to 1.0% against the projected 0.8% and supported U.S. Dollar and added losses in the GBP/USD pair on Friday.

Daily Technical Levels

Support Resistance

1.3286 1.3441

1.3209 1.3519

1.3131 1.3596

Pivot Point: 1.3364

GBP/USD– Trading Tip

The GBP/USD is falling dramatically from 1.3450 to 1.3230 level by the time of covering this report. On the 4 hour timeframe, the GBP/USD pair has dipped sharply and has already violated the upward channel, which supported the pair around the 1.3350 level. The Cable may find the next support at 1.3204 level, and below this, the next support can also be found around 1.3100 level today. On the higher side, the resistance hold around the 1.3300 mark. The MACD and RSI are suggesting selling bais in the pair, we should look for selling trades below 1.3350 and buying over 1.3185 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.186 after placing a high of 104.242 and a low of 103.736. The currency pair USD/JPY rose on Friday amid the supportive U.S. macroeconomic data and the increased U.S. yields.

On Friday, the U.S. Bureau of Labour reported that only 245K jobs were added to the economy while the unemployment rate fell by 0.2% in November and supported the U.S. dollar.

On the data front, at 18:30 GMT, the Average Hourly Earnings advanced to 0.3% against the anticipated 0.1% and supported the U.S. dollar and added gains in the USD/JPY pair. The Non-Farm Employment Change declined to 245K against the anticipated 480K and weighed on the U.S. dollar capped further gains in the USD/JPY pair. The Unemployment Rate declined to 6.7% against the anticipated 6.8% and supported the U.S. dollar.

The Trade Balance from the U.S. came in as -63.1B against the anticipated -64.7B and supported the U.S. dollar and pushed the pair USD/JPY higher. At 20:00 GMT, the Factory Orders for November advanced to 1.0% against the anticipated 0.8% and supported the U.S. Dollar, and added further gains in the USD/JPY pair.

The U.S.’s supportive data proved good news for the market that pushed the S&P 500 to an all-time high and raised the U.S. 10-year yield by 5bps to 0.97%. The rise in U.S. yields also added strength in the U.S. dollar and added gains in the USD/JPY pair. The less than expected job creation by the U.S. Labor Department made the near-term U.S. fiscal stimulus more likely and exerted pressure on Congress to swiftly avert the labor market’s slowdown.

However, the risk sentiment was also strong in the market after the vaccine optimism escalated and supported the hopes that the economic activities will return to pre-pandemic levels. These hopes, along with the rising expectations that the world’s largest economy will also recover soon as the stimulus package was near to be delivered, added to the risk-sentiment. These risk flows added weight on the safe-haven Japanese Yen that supported the USD/JPY pair and pushed it higher.

Meanwhile, the gains in the USD/JPY pair were also limited because of the rising number of coronavirus cases in the U.S. Over the period of 5 days, the U.S. has recorded about 1 million new coronavirus cases, and the hospitalization rate in the U.S. also hit its highest record by reaching more than 104,000 patients in a single day.

The USD/JPY pair rose on Friday due to supportive U.S. macroeconomic data, higher U.S. yields, and the rising risk sentiment in the market due to global economic recovery hopes.

Daily Technical Levels

Support Resistance

103.48 104.35

103.13 104.89

102.60 105.23

Pivot point: 104.01

USD/JPY – Trading Tips

The USD/JPY is trading within a symmetric triangle pattern seen in the 4-hour timeframe. The pair lately violated the sideways trading range of 104.600 – 104.200, and now it’s trading at 104.300 level, especially after bouncing off over 103.700 level on the lower side, supporting the pair around 103.700 level. On the downside, the USD/JPY may find support at the 103.200 level upon a bearish breakout of the 103.750 support level. While resistance stays at 104.350 and 104.700 today. Good luck

Tags Daily Brief, EURUSD, Forex, Forex Trading, Fundamental Analysis, GBPUSD, Technical Analysis, Technical Outlook, trading, USDJPY

Crypto Market Analysis

Daily Crypto Review, Dec 07 – ETHE and GBTC Grayscale Funds Reach All-Time High Average Daily Volumes in November

Post author By Ilija Rankovic
Post date 7 December, 2020
No Comments on Daily Crypto Review, Dec 07 – ETHE and GBTC Grayscale Funds Reach All-Time High Average Daily Volumes in November

The cryptocurrency sector has spent the weekend recovering from the price descent on Dec 3 and 4. Bitcoin is currently trading for $19,288, representing an increase of 0.16% compared to our last report. Meanwhile, Ethereum’s price has decreased by 1.49% on the day, while XRP managed to lose 0.74%.

Daily Crypto Sector Heat Map

Omnitude gained 241.76% in the past 24 hours, making it the most prominent daily crypto gainer. It is closely followed by KIMCHI.finance’s 185% and Badger DAO’s 123.92% gain. On the other hand, DAV Coin lost 71.6%, making it the most prominent daily loser. It is followed by Semux’s loss of 66.12% and Bitball Treasure’s loss of 65.05%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has barely moved to the downside since we last reported, with its value currently being 62.1%. This value represents a difference of 0.3% to the downside when compared to Friday’s value.

Daily Crypto Market Cap Chart

The crypto sector capitalization has decreased over the weekend. Its current value is $551.68 billion, representing an $18.83 billion decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the weekend trying to recover from the downturn it had on Dec 3 and 4. The largest cryptocurrency by market cap has formed a triangle formation that is respected throughout the weekend and then broke it to the upside. While the move was short-lived, the overall short-term bullishness has increased.

Some traders see a bull flag instead of the triangle formation, which makes the possibly future even more bullish. Posting any short trades would most likely be more risky than profitable at the moment.

It is also important to note that the Has Ribbons (one of the best accumulation indicators) indicator has posted a buy signal.

BTC/USD 4-hour chart

Bitcoin’s technicals on all time-frames are bullish, with 4-hour and weekly time-frames showing full tilt to the buy-side and daily and monthly time-frames tilting more towards neutrality.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):

Price is above its 50-period EMA and slightly above its 21-period EMA
Price is slightly above its middle Bollinger band
RSI is neutral (54.36)
Volume is below average

Key levels to the upside Key levels to the downside

1: $19,500 1: $19,000

2: $19,666 2: $18,790

3: $20,000 3: $18,500

Ethereum

Ethereum has spent the weekend slowly pushing towards the upside, reaching just under $600 and bouncing off the resistance level. Its current failure to break $600 is not a big red flag, as Ethereum’s large moves are (lately) mostly caused by Bitcoin’s movement.

Ethereum traders have a great opportunity to catch a safe trade if ETH/USD breaks $600. A stop-loss slightly below $600 and a possible target of $620 or $630 would make quite a viable trade.

ETH/USD 4-hour Chart

Ethereum’s 4-hour, weekly, and monthly overviews show a full tilt towards the buy-side, while its daily overview shows some signs of neutrality.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is slightly above its 50-period and at its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (50.51)
Volume is slightly below average

Key levels to the upside Key levels to the downside

1: $620 1: $600

2: $630 2: $510

3: $735 3: $500

Ripple

The fourth-largest cryptocurrency by market cap experienced slightly more volatility over the weekend than during the previous week, with its price hovering between $0.542 and $0.626. The $0.6 level is currently holding quite well as a support line, and XRP shows no signs of dropping below it unless some external factor surfaces.

Trading XRP is, even with the slight increase in volatility, a near-impossible feat at the moment. Trading other (more volatile) cryptocurrencies could be a much better option.

XRP/USD 4-hour Chart

XRP’s 4-hour, weekly, and monthly overviews show complete bullishness, while its daily overview shows some signs of neutrality.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is at both its 50-period EMA and its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (53.49)
Volume is slightly below average

Key levels to the upside Key levels to the downside

1: $0.666 1: $0.6

2: $0.78 2: $0.596

3: $0.79 3: $0.535

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Crypto Market Analysis

BTC/USD Weekly Chart Analysis + Possible Outcomes

Post author By Ilija Rankovic
Post date 5 December, 2020
1 Comment on BTC/USD Weekly Chart Analysis + Possible Outcomes

In this weekly BTC/USD analysis, we will be taking an in-depth look at the most recent technical formations, as well as look for the possible short-term price outcomes.

Overview

Bitcoin has spent the past week recovering levels it lost in a Nov 25 crash and even managed to push to a new all-time high on some exchanges. Still, the end-goal of Bitcoin above $20,000 was not reached.

Bitcoin’s institutional activity is more than booming, with news coming out left and right about companies investing in crypto, financial institutions preparing to embrace Bitcoin as an asset class, as well as regulators allowing Bitcoin to be held in employees’ company-funded 401k plans. On the other hand, Not being able to push past the $20,000 resistance level due to an incredible amount of sell orders near it has brought Bitcoin bears another day of hoping that the price will go lower.

Technical factors

Bitcoin has continued moving up until reaching an all-time high on some exchanges and then creating a doji candle followed by an inverted hammer candle on a weekly time-frame, indicating a possible bearish outlook as Bitcoin has most likely reached its short-term top. Looking at the shorter time-frames, such as the 4-hour one, we can see that Bitcoin has formed either a triangle formation or (if we include the movement from that started on Nov 27) a bull flag, which goes against the previously mentioned bearish outlook. Any break from the channel Bitcoin is trading in at the moment could mean a strong move towards that side.

The hash ribbons indicator flashed a BUY signal, which is an incredibly important update for long-term investors, as this indicator was the most consistent investment tool when it comes to RoI.

Likely Outcomes

Bitcoin’s sending out mixed signals on different time-frames, indicating indecisiveness from the retail sector. On the other hand, companies and institutions show incredibly bullishness as they are buying up Bitcoin over-the-counter. While a move to the downside is quite possible at the moment, the overall current trend is bullish, and short-selling could possibly harm traders’ portfolios more than they can improve it.

1: If Bitcoin fails to establish itself above $19,100 and breaks the range to the downside (slightly less likely), its most likely target will be $18,450. Due to a large number of buy orders in the zone between $18,190 and $18,450, this is the most likely place for reaccumulation and a push towards the upside after a pullback.

2: If Bitcoin manages to push towards the upside, first breaking $19,100 and then the descending black line (top line of the triangle formation), we can expect the price to attempt another push above $20,000, with the possibility of breaking it this time. If Bitcoin proves to be in a bull flag formation rather than a triangle formation, the profit target stays the same ($19,666 with possibly taking some profits along the way).

Entering any trade with having a target of above $20,000 is quite risky, and it would be better to play it safe and end the trade pre-$20,000 and then re-enter it if the price confidently moves up. The same goes for entering a short trade with sub-$18,450 in mind.

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, Education, Fundamental Analysis, Technical Analysis, trading

Forex Videos

Forex – Fed Saturates The Markets With Dollars – How Should You Trade The Dollar Now!

Post author By Keiran
Post date 4 December, 2020
No Comments on Forex – Fed Saturates The Markets With Dollars – How Should You Trade The Dollar Now!

https://youtu.be/YTCk3etzIE4

Fed saturates the markets with dollars – what next?

In this session, we will be looking at the extraordinary amounts of US dollars, which have been printed by the federal reserve in America and flooded into the system to try and prop up the US economy during the coronavirus.

Since the pandemic began and started to bite in the United States, it is estimated that over 20% of all circulating US dollar bills were printed during this time.

Although the federal reserve has publicly declared that their monetary policy has not been designed to save Wall Street,…..

….there is no denying from this chart that dollars, which are required to buy United States stocks, are finding their way into US stocks and indices, such as the Dow Jones Industrial Average Index shown here, which had climbed from the panic sell-off in March 2020 when the pandemic began to take a grip of the United States, up to record highs of over 30 thousand.

Purely on a supply and demand basis, the shock and magnitude of the influx into the market of the US dollar has gone a long way to shedding its market value against currencies, including the major currency pairs as shown here on this dollar index where it was at a high of 103.00 in March, and while the fed has been pumping dollars into the system, it has collapsed to 91.70 at the time of writing.

While the safety of gold saw investors take flight here during the latter part of March 2020, causing the precious metal to rise in value in a risk-off event during the early stages of the pandemic in the USA to a peak of over 2000 an ounce, and where traders have pulled back while shifting their focus to the US stock market, in a risk-off phase, and where gold currently sits around 1800 per ounce.

The federal reserve has been getting into the markets indirectly, via the backdoor, by talking to hedge funds, mutual funds, credit facilities, market makers, and commercial paper funding facilities, and instigated a huge emergency repo loan operation with the New York fed, where it is said that over 6 trillion dollars have as entered into circulation through this facility.

The Fed’s pumping of dollars into the market, where its value has crashed in value relatively over the last 100 years, has given fuel for the rise in interest for bitcoins and other cryptocurrencies and as we have seen gold and other precious metals, while investors try to hedge against dollar depreciation and inflation, as the dollar continues to lose value against other assets.

And by the time the new president-elect, Joe Biden, takes office, the two political houses in the USA, currently at loggerheads, will agree more stimulus, in the range of 1 to 2 trillion dollars, and where once this has been agreed, this will only pour more oil on the burning cauldron and the effect will likely be the US dollar’s further decline, with a knock-on effect being volatility in the financial markets, and higher prices for consumers.

Tags Education, FED, Forex, Forex Trading, Fundamental Analysis, printing dollars, trading

Forex Market Analysis

Daily F.X. Analysis, December 04 – Top Trade Setups In Forex – NFP in Highlights!

Post author By Ali B.
Post date 4 December, 2020
No Comments on Daily F.X. Analysis, December 04 – Top Trade Setups In Forex – NFP in Highlights!

The eyes will remain on the U.S. NFP data on the news side, which is expected to report a slight drop from 638K to 500K during the previous month. Besides, the U.S. Average Hourly Earnings m/m and Unemployment Rate will also remain the main highlight of the day, and these may determine the USD trend for today and next week. Let’s wait for the news.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.21474 after placing a high of 1.21744 and a low of 1.21008. EUR/USD pair extended its gains for the 3rd consecutive day on Thursday due to the U.S. dollar’s weakness amid the rising hopes for the next round of U.S. stimulus package from Congress.

The Top Democrats, Joe Biden, and Nancy Pelosi backed the bipartisan $908 billion stimulus plan on the previous day. They urged the Senate Majority Leader Mitch McConnell to drop his plan to bring a more modest package. All top Democrats, including the President-elect Joe Biden, Nancy Pelosi, and the Senate Minority Leader Chuck Schumer, said that the bill would be acceptable as a starting point.

The need for more stimulus relief packages to support the economy was increasingly evident, with both the ADP Non-Farm Payrolls and the ISM manufacturing survey below the expectations. Meanwhile, Car and Truck sales in November also fell from October level. On the coronavirus front, the U.S. had its deadliest day since the start of the pandemic on Thursday, with over 2700 recorded deaths due to coronavirus. Over the past 2-days alone, the death toll has reached 5000. The number of hospitalized people also reached for the first time, an alarming level of 100,000. All these developments weighed heavily on the U.S. dollar on Thursday and added strength to the EUR/USD pair.

The Spanish Services PMI for November raised to 39.5 against the expected 36.5 and supported Euro and added further gains in EUR/USD pair. At 13:45 GMT, the Italian Services PMI declined to 39.4 against the forecasted 40.9 and weighed on Euro. At 13:50 GMT, the French Final Services PMI fell to 38.8 against the anticipated 49.1 and weighed on Euro. AT 13:55 GMT, the German Final Services PMI came in line with the expectations of 46.2. At 14:00 GMT, the Final Services PMI from Eurozone raised to 41.7 against the expected 41.3 and supported Euro and the EUR/USD pair raised further. At 15:00 GMT, the Retail Sales for October also surged to 1.5% against the anticipated 0.7% and supported Euro and helped the EUR/USD pair to continue its bullish momentum.

From the U.S. side, at 17:30 GMT, the Challenger Job Cuts for the year in November came in as 45.4%against the previous 60.4%. At 18:30 GMT, the Unemployment Claims from last week fell to 712K against the anticipated 775K and supported the U.S. dollar. At 19:45 GMT, the Final Services PMI for November surged to 58.4 against the anticipated 57.5 and supported the U.S. dollar. At 20:00 GMT, the ISM Services PMI stayed as anticipated 55.9.

Daily Technical Levels

Support Resistance

1.1971 1.2122

1.1873 1.2175

1.1819 1.2273

Pivot point: 1.2024

EUR/USD– Trading Tip

On Friday, the EUR/USD pair continues to trade sideways ahead of the NFP figures, which may drive sharp movements during the U.S. session.

On the higher side, the EUR/USD may find an immediate resistance at 1.2160 and 1.2196 level. Simultaneously, the closing of candles below the 1.2103 level can send the EUR/USD pair further lower until 1.2080. Trend depends upon the NFP data.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.34525 after placing a high of 1.34998 and a low of 1.33288. The GBP/USD pair rose and reached above one year’s highest level over the bullish Brexit bets and the U.S. dollar’s weakness. On Thursday, the latest news raised the British Pound over the board that suggested that the Brexit trade deal could be reached by the weekend after the two sides showed hints of compromise over fish quotas. The positive news made the British Pound the best performer on the day in the G10 currencies.

In an attempt to break the deadlock, Mr. Barnier and Boris Johnson lowered their demands by asking to get back only 60% of the fish that E.U. boats currently catch in British waters, down from 80%. Under the reported proposal, the U.K. would hold onto increased stocks of fish that are sold in the U.K. while the E.U. will keep the similar quotas of stock that are popular in the E.U. but not in the U.K.

The compromise was reported less than a week after E.U. Brexit negotiator Michel Barnier proposed to return about 15-18% of the fish caught by European fleets in British waters to the U.K. under a free trade agreement; however, at that time, the U.K. rejected this proposal.

The progress on fisheries is progress after a months-long stalemate; however, other key sticking points, including the level-playing field and governance, need to be solved to reach a deal. The time for the end of the Brexit transition period is near, and both sides have shown hints that a deal might reach by this weekend.

All these optimistic Brexit progress reports gave the local currency British Pound strength and supported the GBP/USD pair’s upward momentum that led the pair to its one-year highest level near 1.35000 on Thursday.

On the data front, at 14:30 GMT, the Final Services PMI from Britain raised to 47.6 against the expected 45.8 and supported British Pound and added further gains in GBP/USD pair.

From the U.S. front, at 17:30 GMT, the Challenger Job Cuts for the year in November came in as 45.4%against the previous 60.4%. At 18:30 GMT, the Unemployment Claims from last week declined to 712K against the projected 775K and supported the U.S. dollar. At 19:45 GMT, the Final Services PMI for November rose to 58.4 against the projected 57.5 and supported the U.S. dollar. At 20:00 GMT, the ISM Services PMI stayed as projected 55.9.

Furthermore, the gains in GBP/USD pair on Thursday were also because of the U.S. dollar’s weakness due to the progress in talks to reach a consensus between Republicans & Democrats over the second round of stimulus talks. Joe Biden, Nancy Pelosi, and Chuck Schumer have shown their consent for the bipartisan bill of $908 billion. This progress raised the hopes for a stimulus bill and weighed on the U.S. dollar that added strength to the GBP/USD pair.

Daily Technical Levels

Support Resistance

1.3286 1.3441

1.3209 1.3519

1.3131 1.3596

Pivot Point: 1.3364

GBP/USD– Trading Tip

The GBP/USD is trading sideways in between a fresh trading range of 1.3305 – 1.3445. Breakout of this range can lead the Cable price towards the 1.3517 level. The volatility seems low ahead of the Christmas holidays. However, the European session can trigger a buying trend until the 1.3515 level, while support continues to stay at the 1.3305 level. A bearish breakout of the 1.3305 level can trigger selling until the 1.3212 level. The MACD and RSI are suggesting a bullish bias in the market. Let’s consider taking buying trades over 1.3305 and 1.3447 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 103.841 after placing a high of 104.534 and a low of 103.669. The USD /JPY pair dropped to its lowest since November 18 on Thursday due to broad-based U.S. dollar weakness.

The U.S. Dollar Index extended its losses for 3rd consecutive day on Thursday and fell to a 31-month lowest level below 91.10 after the hopes for the next round of stimulus raised in the market. The top three Democratic Leaders, President-elect Joe Biden, House Speaker Nancy Pelosi, and Senate Minority Leader Chuck Schumer, backed the bipartisan proposal for a coronavirus relief package worth $908 billion. They all urged the Senate Majority Leader Mitch McConnell to drop his plans of bringing a more modest package back to the floor of the upper chamber.

Both parties agree that more relief aid should be delivered to Americans to curb the coronavirus pandemic’s effects but have differences over the size, method, and healthcare system. The renewed efforts to strike a deal followed a months-long deadlock over the second stimulus relief package and weighed heavily on the greenback that added losses in the USD/JPY pair.

On the data front at 17:30 GMT, the Challenger Job Cuts for the year in November came in as 45.4%against the previous 60.4%. At 18:30 GMT, the Unemployment Claims from last week dropped to 712K against the estimated 775K and supported the U.S. dollar, and capped further losses in the USD/JPY pair. At 19:45 GMT, the Final Services PMI for November rose to 58.4 against the estimated 57.5 and supported the U.S. dollar. At 20:00 GMT, the ISM Services PMI stayed as estimated at 55.9.

Furthermore, the U.S. dollar was also weak because of the rising cases of coronavirus in the U.S. The U.S. saw its deadliest day since the start of the pandemic on Thursday after 2,700 deaths were reported in a single day. Over the past two days only, the death toll has reached 5,000 in the U.S. from the coronavirus, and the hospitalization rate has also increased, with more than 100,000 cases reported to be hospitalized in a single day.

These raised concerns for the U.S. economy as many states were still under strict restrictive measures, and the economic activities there were still affected. The rising number of deaths might weigh more on the local currency. The U.S. dollar came under pressure and dragged the USD/JPY pair further on the downside.

Daily Technical Levels

Support Resistance

104.13 104.54

103.95 104.77

103.72 104.95

Pivot point: 104.36

USD/JPY – Trading Tips

The USD/JPY has violated the sideways trading range of 104.600 – 104.200, and now it’s trading at 103.876 level. On the lower side, the pair has formed a triple bottom level, supporting the pair around 103.700 level. Investors seem to wait for the U.S. NFP and unemployment rate figures to determine further U.S. dollar trends. On the lower side, the USD/JPY may head towards the 103.200 level upon a bearish breakout of the 103.750 support level. While resistance stays at 104.350 today. Good luck

Tags Daily Brief, Forex, Forex Trading, Fundamental Analysis, Price Action, Technical Analysis, Technical Outlook, trading

Crypto Market Analysis

Daily Crypto Review, Dec 4 – Bitcoin Above $19,000; Ether Fighting for $600

Post author By Ilija Rankovic
Post date 4 December, 2020
No Comments on Daily Crypto Review, Dec 4 – Bitcoin Above $19,000; Ether Fighting for $600

The cryptocurrency sector has spent the day trying to regain its recent highs, with Ethereum breaking $600 and Bitcoin breaking $19,000. Bitcoin is currently trading for $19,314, representing an increase of 1.14% compared to our last report. Meanwhile, Ethereum’s price has increased by 2.15% on the day, while XRP managed to lose 0.52%.

Daily Crypto Sector Heat Map

The past 24 hours have passed without any major winners or losers in the top100 cryptos. Ren gained 5.23% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Band Protocol’s 4.44% and VeChain’s 4.08% gain. On the other hand, Decentraland lost 4.98%, making it the most prominent daily loser. It is followed by Uniswap’s loss of 4.79% and Kyber Network’s loss of 4.49%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has barely changed since we last reported, with its value currently being 62.4%. This value represents a difference of 0.1% to the upside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The crypto sector capitalization has decreased just slightly in the past 24 hours. Its current value is $570.51 billion, representing a $0.54 billion decrease compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day trying to break its immediate resistance (which is sitting at $19,490). However, all attempts throughout the day have been unsuccessful, which prompted Bitcoin to pull back slightly. However, the largest cryptocurrency by market cap has established its presence above $19,000 with confidence once again.

Bitcoin is quite unpredictable at the moment, making safe trades hard to find. Traders should pay attention to BTC volume and enter trades with a high profit/loss ratio to quickly mitigate the risk of things turning from good to bad.

BTC/USD 1-hour chart

Bitcoin’s technicals on all time-frames are bullish, but they all show some signs of neutrality (or even bearishness) alongside the overall bullishness.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):

Price is currently above its 50-period EMA and slightly above its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (56.72)
Volume is average

Key levels to the upside Key levels to the downside

1: $19,500 1: $19,000

2: $19,666 2: $18,790

3: $20,000 3: $18,500

Ethereum

Ethereum has spent the day following Bitcoin’s movement, with its price first pushing towards the upside and then pulling back as it was unable to break a certain level (in this case, $620. On the other hand, the second-largest cryptocurrency by market cap has seemingly established its presence above $600, though not with nearly as much conviction as Bitcoin did.

If Ethereum traders followed our advice from yesterday’s analysis, they would have made quite a good profit by longing Ether after it broke $600, with a stop-loss set slightly below this level. While trading Ethereum is still quite possible, the current high correlation with Bitcoin’s movement makes Bitcoin a (possibly) better option to trade, simply due to fewer variables a trader would have to consider.

ETH/USD 1-hour Chart

Ethereum’s daily and monthly overviews are completely bullish, while its 4-hour and weekly time-frames show some form of neutrality next to the overall bullishness.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is currently above its 50-period and slightly above its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (57.22)
Volume is average

Key levels to the upside Key levels to the downside

1: $620 1: $600

2: $630 2: $510

3: $735 3: $500

Ripple

The fourth-largest cryptocurrency by market cap has had another extremely slow day, with its price barely fluctuating at all. The low volume and low volatility are continuing throughout the week, with XRP just barely moving to the downside as a response to the minor pullback caused by Bitcoin’s movement.

Trading XRP is a near-impossible feat at the moment, as the cryptocurrency currently shows no volatility and (therefore) no trade opportunities.

XRP/USD 2-hour Chart

XRP’s daily and monthly overviews are completely bullish, while its weekly time-frames show bullish sentiment with a hint of neutrality. Its 4-hour overview, however, is completely bearish.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is (at the moment of writing) slightly above its 50-period EMA and slightly below its 21-period EMA
Price is slightly below its middle Bollinger band
RSI is neutral (48.53)
Volume is slightly below average

Key levels to the upside Key levels to the downside

1: $0.666 1: $0.6

2: $0.78 2: $0.596

3: $0.79 3: $0.535

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Fundamental Analysis

GBP/USD Global Macro Analysis – Part 3

Post author By Reddy Shyam Shankar
Post date 3 December, 2020
2 Comments on GBP/USD Global Macro Analysis – Part 3

Introduction

The exogenous analysis will cover international aspects that impact both the UK and the US and how they influence the GBP/USD price. These factors include:

Good trade balance
Interest rate differential
GDP growth differential

GBP/USD Exogenous Analysis – Summary

The score for the exogenous analysis of the GBP/USD pair is -3. This deflationary score implies that we should expect that the pair will adopt a bearish trend in the near term.

Goods trade balance

The goods trade balance is the difference between the value of goods a country imports and its exports. When the balance is negative, it means that the country is importing more than it exports. If the goods trade balance is a surplus, it means that a country’s value of exports is more than its imports.

In September 2020, the UK’s goods trade deficit increased to £9.35 billion while that of the US increased to $80.29 billion. Based on the correlation between t goods trade balance and the price of GBP/USD, we assign it an inflationary score of 2. It means if the goods trade balance keeps widening between the two countries, we can expect that the GBP/USD pair will continue being bullish.

The UK and the US Interest rate differential

This is the difference between the interest rate set by the Bank of England and the interest rate fixed by the US Federal Reserve. Capital tends to flow towards the economy with a higher interest rate since investors are bound to earn higher returns.

The BOE has set the interest rate at 0.1%, while the FED has it at 0.25%. therefore, the interest rate differential for the GBP/USD pair is 0.1% – 0.25% = -0.15%. Based on the interest rate differential, the GBP/USD pair should have a bearish trend. Therefore, we assign it a score of -3.

GDP growth differential

The actual size of the GDP varies from country to country. However, we can compare the rate at which they grow and analyse the impact of this growth rate on the exchange rate.

In the third quarter of September 2020, the UK GDP expanded by 15.5% while that of the US expanded by 33.1%. Over the years, we can observe that the US GDP growth has been at a faster rate than that of the UK. In this case, we assign a deflationary score of -2 on the UK and the US GDP growth rate differential. That means if the US economy keeps expanding at a faster rate, we can expect a bearish GBP/USD in the near term.

Our technical analysis also supports the forecasted bearish trend in the near term. Note that the GBP/USD pair has failed to breach the upper Bollinger band forming a resistance level for the past two years.

We hope you found this analysis useful and informative. Let us know if you have any questions by commenting below. All the best.

Tags Education, Exogenous Analysis, Forex, Forex Fundamental Analysis, Forex Trading, Fundamental Analysis, GBP, Macro Economics, trading, USD

Forex Fundamental Analysis

GBP/USD Global Macro Analysis – Part 1 & 2

Post author By Reddy Shyam Shankar
Post date 3 December, 2020
No Comments on GBP/USD Global Macro Analysis – Part 1 & 2

Introduction

To properly understand the dynamics of the price of the GBP/USD pair, we’ll conduct endogenous and exogenous analyses of the UK and the US economies.

The endogenous analysis will focus on the significant fundamental economic indicators that drive economic growth in either country. The exogenous analysis will dig deeper into how both the US and the UK economies interact with each other in terms of international trade that impact the currency exchange.

Ranking Scale

Both the endogenous and the exogenous factors that we will analyse will be ranked on a sliding scale from -10 to +10. A negative score means that the indicator resulted in currency depreciation, while a positive score implies that it led to currency appreciation.

USD Endogenous Analysis – Summary

The USD endogenous factors recorded a score of -19.1, implying a deflationary effect on the USD. This essentially means that according to these indicators, the USD has lost its value since the beginning of this year.

You can find the complete USD Endogenous Analysis here.

GBP Endogenous Analysis – Summary

The endogenous analysis of the UK economy results in an expansionary score of 2. Therefore, we could expect the GBP increased in 2020.

Markit Manufacturing PMI

This is a survey done on about 600 purchasing managers in the manufacturing industry, who rate the level of the business environment such as prices, new orders, inventories, supply deliveries, labour conditions, and production levels.

This is a leading indicator for the economy because businesses react almost instantly to the changing operating environment, and the purchasing managers have the most relevant insight. In November 202, the UK Manufacturing PMI was 55.2, showing that the economy is undergoing a sustained recovery. Due to its low correlation with the GDP, we assign an inflationary score of 3.

UK inflation

The CPI is based on a monthly survey done by the Office for National Statistics. This is done by comparing the current average of sample consumer items by the previous month’s prices. The BOE uses the data to adjust interest rates and QE levels to set inflation targets for the economy.

Rising inflation levels lead to higher interest rates, which makes CPI a vital currency valuation indicator. The UK inflation rate increased by 0.7% in October 2020 but is still lower than the rate in the pre-pandemic period. Based on our correlation analysis. We assign it a score of -4.

Manufacturing Production

It measures the change in the total value of inflation-adjusted output by the manufacturers in the whole economy. It is a leading indicator of the economy’s performance since production levels adjust quickly to the business cycles and heavily dependent on consumer conditions like employment changes and earning levels.

Manufacturing contributes about 80% of the UK’s industrial output and accounts for up to 42.4% of GDP changes. The year-on-year manufacturing production change in September 2020 was -7.9%. This marks the smallest decline since the onset of the coronavirus pandemic. Due to its high correlation with GDP, we assign it an inflationary score of 6.

Claimant count change

It measures the change in the number of people who are seeking unemployment benefits. Hence, it is the primary indicator of unemployment levels, which makes it a vital signal of consumer expenditure levels and labour market conditions. In the UK, claimant count change is considered the best measure of the employment situation, and it accounts for 30% of changes in the GDP.

In September 2020, the number of people in the UK who claimed unemployment benefits dropped by 29800. However, the unemployment rate remains at yearly highs of 4.8%. For this reason, we assign a score of -5.

Industrial Production

It measures the change in output from the mines, manufacturers, and utilities, adjusted for inflation. While manufacturing makes up 80% of the industrial production, mines and utilities make up 20%, and their effects on the real economy are thus overshadowed.

It is a significant leading indicator of the economy’s health since industrial activities correspond to labour market conditions and sensitive to business cycles. In September 2020, the UK industrial MoM production increased by 0.5%. However, on a YoY basis, it is down 6.3% from September 2019. In this case, we assign industrial production a score of -3.

Retail Sales

It measures the change in the inflation-adjusted value of all sales at the retail level in the whole economy. It is the primary measure of how much consumer expenditure accounts for most of the country’s economic activity.

In October 2020, the UK MoM retail sales increased by 1.2%, which is the 6^th consecutive increase in retail sales from the slump recorded at the height of the coronavirus pandemic. Based on its correlation with GDP, we assign retail sales an inflationary score of 4.

Markit Services PMI

This is a survey on about 400 purchasing managers in the services industry, who rate the business environment using factors such as employment, new orders, pricing, inventories, and supplier deliveries. A score of above 50 signifies an expansion, while below 50 indicates a contraction in the services industry.

In November 2020, the Marking UK Services PMI was 45.8 – a significant drop from 51.4 in October. Although the Services PMI has increased from the April lows, it is still lower than in January 2020. Combined with its low correlation with the UK GDP, we assign a deflationary score of -3.

United Kingdom Public Sector Net Debt to GDP

This is also called Government Debt to GDP Ratio. Most investors, bilateral and multilateral lenders use this ratio to determine a country’s ability to service any debt they take on. Naturally, when the ratio is higher, it means that the government is piling on more debt, but the GDP is not increasing at the same rate. Since higher GDP would mean higher sources of revenue, if the GDP is not increasing at the same pace as the amount of debt, it implies that the government might struggle with debt repayment.

In 2020, the UK Public Sector Net Debt to GDP is projected to reach historic highs of 96.6%. This increase is mainly attributed to governments’ efforts to prop up the economy through aggressive expansionary policies during the pandemic. Based on our correlation analysis, the increase in the United Kingdom Public Sector Net Debt to GDP in 2020 served its purpose to avoid irreversible recessions. We, therefore, assign an inflationary score of 4.

In our next article, we will analyze the Exogenous factors of both USD and GBP to come to an appropriate conclusion.

Tags Education, Endogenous Analysis, Exogenous Analysis, Forex, Forex Trading, Fundamental Analysis, fundamentals, GBP, Global Macro Analysis, Macro Analysis, PMI, trading, USD

Forex Fundamental Analysis

Understanding ‘US TIC Net Long-Term Transactions’ Fundamental Forex Driver

Post author By Reddy Shyam Shankar
Post date 3 December, 2020
No Comments on Understanding ‘US TIC Net Long-Term Transactions’ Fundamental Forex Driver

Introduction

When foreign investors prefer investing in the domestic economy, they strongly believe that they can get better returns than in any other market. The US is considered the leading economy in the world; therefore, hence US securities are highly trusted by most investors. Similarly, since the USD is the most traded currency in the international market, its value would fluctuate depending on investors’ optimism in the capital and money market of the US.

Understanding US TIC Net Long-Term Transactions

As an economic indicator, the US TIC Net Long-Term Transactions measures the net flow of financial securities in the US economy. The financial securities under consideration include; Treasury and agency securities, corporate bonds, and equities.

Therefore, the ‘net’ in the US TIC Net Long-term Transactions means the difference between US financial securities’ gross purchases and sales by foreign investors. This data provides a vivid overview of the participation of foreigners in the US capital and money markets. When the US TIC net long-term transactions data is positive, it means that more foreigners are buying into the US economy than those selling. Similarly, when the US TIC net long-term transactions data is negative, it means more foreigners are exiting the US economy compared to those buying into the economy.

So, what is TIC? TIC stands for Treasury International Capital, a financial report from the US Department of Treasury. It shows the flow of capital into and out of the US in both the short and long term. The TIC report is published monthly and quarterly; it details the flow of capital explicitly in the sale and purchase of US financial securities.

According to the TIC reports, the classification of foreigners does not necessarily mean individuals and institutions from abroad. Foreigners in this context also include foreign branches of US institutions. For example, if a US bank has a branch in London, that branch is considered a foreigner.

Using US TIC Net Long-Term Transactions in Analysis

The main point of the US TIC Net Long-Term Transactions Report is it shows the demand for USD stocks and investors’ sentiment towards the US economy. Let’s break down the US TIC Net Long-Term Transactions depending on the market.

If the US TIC net long-term transactions, it could signal that the US treasuries and bonds are in high demand. First, you should know why investors would demand more of US treasuries. The US treasuries and bonds are considered to be risk-free. The reason for this is because investors are guaranteed to receive a fixed amount of coupon rate until maturity.

More so, the US treasuries also come with an inherent guarantee that the US government will not default the interest payment and that investors will receive their principal upon maturity. Furthermore, the US’s interest rates are relatively higher than other developed nations; this means that investors in the US government securities stand to profit more by investing in the US.

The level of purchase of the US TIC net long-term transactions also says a lot about the expected inflation. In the long term, most investors worry that if the rate of inflation increases rapidly, it will reduce their profits. Thus, any investor would prefer to invest in a country with stable inflation, which would ensure that their returns are not severely affected.

Therefore, when the US TIC net long-term transactions are positively increasing, it means that foreign investors expect the US economy to be relatively stable over the long term. It is taken as confidence that the Federal Reserve will keep long term inflation in check.

Source: St. Louis FRED

Conversely, if the US TIC net long-term transactions are negative, it implies that there are more sellers than buyers. This scenario could imply that foreign investors believe that the long-term inflation rate will exceed the rate of returns they will receive from their investments. Since their expected real returns will be diminished, they prefer to invest their money in other economies.

The US TIC net long-term transactions can also be used to show impending recessions and optimism about economic recoveries. Let’s use the recent coronavirus pandemic as an example. In the first quarter of 2020, the US TIC net long-term transactions plunged to historic lows. It means that more foreign investors were exiting the US capital and money markets and presumably investing their funds elsewhere. This net outflow was a result of the uncertainty of what the pandemic might bring.

Source: Trading Economics

In the second quarter of 2020, the US TIC net long-term transactions jumped back to positive territory, implying that foreign investors were pouring back into the US capital and money markets. Note that this net inflow coincides with the passing of the $2 trillion stimulus package. Therefore, we can argue that the net inflow of US TIC net long-term transactions was a vote of confidence by foreign investors that in the long term, the US economy will rebound from the pandemic-induced recession.

Impact of US TIC Net Long-Term Transactions on Currency

The impact of the US TIC net long-term transactions on the USD is pretty straightforward. In the international market, foreigners are obliged to convert their currencies into the USD. Therefore, an increase in the US TIC net long-term transactions means that the demand for the USD increases as well. Consequently, the increase in the demand for the USD makes it appreciate relative to other currencies.

Conversely, when US TIC net long-term transactions show net outflows, the USD will depreciate relative to other currencies. This is because when foreigners sell the US financial securities, they will convert the USD to their domestic currencies when repatriating their money.

Data Sources

The US Department Of The Treasury is responsible for collating and publishing the monthly and quarterly US TIC net long-term transactions. Trading Economics has detailed historical data on the US TIC net long-term transactions.

How US TIC Net Long-Term Transactions Release Affects The Forex Price Charts

The latest monthly publication of the US TIC net long-term transactions was on October 16, 2020, at 4.00 PM EST. The release can be accessed at Investing.com. Moderate volatility on the USD can be expected when the US TIC net long-term transactions report is released.

In August 2020, the US TIC net long-term transactions were $27.8 billion compared to $11.3 billion in July 2020. In theory, this increase should be positive for the USD.

Let’s see how this release impacted the GBP/USD pair.

GBP/USD: Before US TIC Net Long-Term Transactions Release on October 16, 2020, 
just before 4.00 PM EST

Before the publication of the US TIC net long-term transactions, the GBP/USD pair was trading in a subdued uptrend. The 20-period MA was almost flattened with candles forming just above it.

GBP/USD: After US TIC Net Long-Term Transactions Release on October 16, 2020, 
at 4.00 PM EST

After the publication of the US TIC net long-term transactions, the pair formed a 5-minute bearish candle. Subsequently, GBP/USD adopted a bearish trend showing that the USD significantly strengthened against the GBP. The 20-period MA steeply fell as candles formed further below it.

Bottom Line

From this analysis, it is evident that the US TIC net long-term transactions release has a significant impact on the forex market. The report shows the confidence of investors in the US economy and the demand for the US Dollar.

Tags Economic Indicators, Education, Forex, Forex Fundamental Trading, Forex Trading, Fundamental Analysis, Macro Economics, trading, US TIC Net Long-Term Transactions

Forex Course

185. Knowing Which News Release To Trade Is Crucial!

Post author By Reddy Shyam Shankar
Post date 3 December, 2020
No Comments on 185. Knowing Which News Release To Trade Is Crucial!

Introduction

Before you develop your trading strategy around the news releases, you first need to decide which news you will use for trading. As we mentioned in our previous course, different economic releases have a varying impact on the forex market. Since the aim of any trade is to gain as many pips as possible, it is only natural that you trade news releases that create high impact – those which can significantly move the forex market in the short-term; or even the longer-term.

The primary way to identify high-impact news releases is by establishing which economic indicator gives a relevant, most current, and comprehensive overview of the economy. The high-impact news releases usually cover these aspects;

Central banks’ monetary policies: These policies can impact future economic growth – both in the short and long term.

Labour market reports: Such reports tend to be of the changes in the previous month. They are a leading indicator of changes in household demand, which is a major contributor to economic growth.

Manufacturing and industrial activities: These sectors are usually among the largest employers in the labor market. Monitoring their growth can be a leading indicator of GDP growth and changes in the unemployment levels.

The services industry: This industry is the first to be impacted by changes in consumer demand.

You don’t have to stress about determining which specific economic indicators are high-impact. The economic calendars take care of this for you. Furthermore, there are several economic calendars out there, so you can compare multiple calendars and check put the consensus about the impact magnitude of the various news releases.

Note that these calendars have a legend to indicate the magnitude of the news release. They show whether the news will have high, medium, or low volatility.

Here’s our recommended list of high-impact economic indicators.

GDP releases
Inflation indicators like CPI, PPI, and PCE
Interest rate decision
Unemployment rate and wages data
Industrial production, factory orders, or manufacturing production
Retail sales
Surveys on the manufacturing sector and services industry
Sentiment surveys on consumers and businesses

It is important to note that geopolitical developments can be happenstance. These events could include upcoming elections in major economies, natural disasters like tsunamis, pandemics, and geopolitical conflicts. When these events happen, the impact of the release of the economic indicators may change.

For example, towards the end of Q2 in 2020, the impact of these economic indicators was heightened. The reason is that they signaled the rate of economic recoveries after the coronavirus-induced recessions. Furthermore, they showed whether or not the expansionary policies adopted impacted the economy as expected.

[wp_quiz id=”94066″]

Tags Education, Forex, Forex Course, Forex Trading, Fundamental Analysis, News Release, trading, Trading Fundamentals, Trading news

Forex Market Analysis

Daily F.X. Analysis, December 03 – Top Trade Setups In Forex – Services PMI under Spotlight!

Post author By Ali B.
Post date 3 December, 2020
No Comments on Daily F.X. Analysis, December 03 – Top Trade Setups In Forex – Services PMI under Spotlight!

The focus will remain on the range of services PMI numbers from the Eurozone and U.K. on the data front. Most of the data is anticipated to be neutral; nevertheless, the U.S. Unemployment Claims and ISM Services PMI will be the main highlight of the day.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD closed at 1.21150 after placing a high of 1.21182 and a low of 1.20398. The EUR/USD pair rose to its highest since April 2018 on Wednesday amid rising optimism from the vaccine front and the fiscal stimulus hopes.

On Wednesday, the U.K. regulator approved Pfizer and BioNtech’s vaccine for emergency use to fight against the coronavirus. This news added further support to the already improved risk sentiment in the market and helped the EUR/USD pair to rise as it is a riskier asset.

On the data front, at 12:00 GMT, the German Retail Sales for October raised to 2.6% against the projected 1.3% and supported Euro that added further gains in EUR/USD pair. At 13:00 GMT, the Spanish Unemployment Change dropped to 25.3K against the estimated 54.5K and supported Euro and added further gains in EUR/USD pair. At 14:00 GMT, Italian Monthly Unemployment Rate for October declined to 9.8% against the forecasted 9.9% and supported Euro and helped EUR/USD rise. At 15:00 GMT, the PPI for October raised to0.4% against the forecasted 0.2% and kept the single currency Euro and gave additional support to EUR/USD pair. The Unemployment Rate in Eurozone remained flat at 8.4%.

At 18:15 GMT, the ADP Non-Farm Employment Change for November fell to 307K against the anticipated 433K and weighed on the U.S. dollar and added further in EUR/USD pair. After the release of macroeconomic data on Wednesday, the currency pair EUR/USD raised sharply and surpassed the 1.2100 level as all the data was in favor of it. Meanwhile, the lawmakers in Washington continued their negotiations related to a fiscal stimulus deal to support the U.S. economy. The negotiations weighed on local currency and made the U.S. dollar weak across the board. Furthermore, the optimism about a $908 billion package also boosted the market’s risk sentiment and weighed on the U.S. dollar that added additional gains in EUR/USD pair.

The U.S. dollar was also weak because of the rising number of coronavirus cases in the U.S. On Wednesday, the total number of deaths from coronavirus set a new record in a single day, and hospitalizations also reached an all-time high. On Wednesday, about 100,200 patients of coronavirus were hospitalized in the U.S. The U.S. Dollar Index on Wednesday slumped to its lowest level in more than 30 months at 91.10 and supported the upward momentum of the EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1971 1.2122

1.1873 1.2175

1.1819 1.2273

Pivot point: 1.2024

EUR/USD– Trading Tip

The bullish bias of the EUR/USD continues to dominate the market as the pair surged further higher until the 1.2117 level. On the higher side, the EUR/USD may find an immediate resistance at 1.2150 and 1.2196 level. Simultaneously, the closing of candles below the 1.2153 level can send the EUR/USD pair further lower until 1.2080. On the 4 hour timeframe, the EUR/USD has formed an upward channel, which is suggesting odds of further buying trend in the pair. The MACD is forming histograms above 0, suggesting odds of an upward trend in the market. Let’s consider the buying trend until the 1.2200 level today.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.33651 after placing a high of 1.34410 and a low of 1.32875. The British Pound erased gains and slipped to a 3-week lowest level on Wednesday after the E.U.’s chief Brexit negotiator said that progress in talks had stalled and cooled the expectations that a deal was near.

Michel Barnier said that a deal was not guaranteed and signaled that differences over key issues, including access to the U.K. fishing waters and level playing field rules, were still there. A day before this news, reports suggested that post-Brexit trade talks had reached the so-called tunnel. Tunnel refers to a situation where both parties don’t leave until a consensus is reached.

Ahead of the update, there were signs the ongoing impasse was starting to frighten some members, who have called on the E.U. to start preparation for a no-deal scenario. There likely could be another twist to come in Brexit talks in the days ahead with the U.K.’s proposal for a new finance bill. This bill undermines some parts of the original Brexit Withdrawal agreement, and it could dent the little progress in negotiations seen so far.

Whereas, Barnier said that if the U.K. government moved ahead next week with draft clauses in the Finance Bill that were inconsistent with the Withdrawal Agreement, then the talks will come under crisis.

All these negative reports depressed Brexit’s expectations and started to weigh on British Pound that added losses in GBP/USD pair. The time for an end of Brexit transition period on December 31 has come near, and if a deal has not been reached by then, U.K. will have to follow WTO rules and regulations while trading with the E.U.

Meanwhile, on the data front, at 05:01 GMT, the BRC Shop Price Index for the year dropped to -1.8% against the forecasted -1.3% and weighed on British Pound and added pressure on GBP/USD pair. On the U.S. front, at 18:15 GMT, the ADP Non-Farm Employment Change for November dropped to 307K against the anticipated 433K and weighed on the U.S. dollar, and capped further losses in the GBP/USD pair.

Daily Technical Levels

Support Resistance

1.3340 1.3468

1.3263 1.3519

1.3212 1.3595

Pivot point: 1.3391

GBP/USD– Trading Tip

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.410 after placing a high of 104.749 and a low of 104.223. The USD/JPY pair raised for the third consecutive day on Wednesday amid the market’s optimism. However, most of USD/JPY’s daily gains were lost during the late trading session as U.S. stimulus raised.

The risk sentiment in the market was improved after the successful vaccine development from famous drug companies. Pfizer and BioNtech even received approval from the U.K. administration for emergency use authorization of their vaccine on Wednesday. Pfizer & BioNtech became the first in the world to get approval for the widespread use of their vaccine. It means that their vaccine can now be used to prevent the coronavirus officially, and it raised the risk sentiment in the market that ultimately added weight on the Japanese Yen due to its safe-haven nature; thus, it supported the upward momentum of the USD/JPY pair.

The Monetary Base for the year dropped to 16.5% against the forecasted 17.2%. At 09:59 GMT, Consumer Confidence raised to 33.7 against the anticipated 33.0 and supported the Japanese Yen that capped additional gains in the USD/JPY pair on Wednesday. At 18:15 GMT, the ADP Non-Farm Employment Change for November fell to 307K against the estimated 433K and weighed on the U.S. dollar that limited the gains of the USD/JPY pair on Wednesday.

The prospects of a U.S. coronavirus relief package weighed on the greenback and forced the currency pair USD/JPY to lose most of its daily gains. As the $1.4trillion spending bill’s support increased, the top U.S. economic officials on Tuesday advised Congress to present more assistance for small businesses to survive during the pandemic.

Meanwhile, Philadelphia Federal Reserve Bank President Patrick Harker said on Wednesday that due to the increased spread of the coronavirus and delayed fiscal help along with the permanent job loss of some workers, the U.S. economic growth has been moderate.

Harker also forecasted moderate growth for the rest of this year and the first quarter of 2021. He also predicted that the economy would stay below pre-pandemic levels. Harker also said that if the vaccine is widely available by next spring and summer, then the growth will pick up in the second half of the next year. Harker added that more financial support was needed to get the economy to that point and to support low-income households.

Harker also said that the Central Bank’s emergency lending programs should be extended beyond next year as they are set to expire on December 31. Harker’s comments came in after Treasury Secretary Steven Mnuchin asked the Fed to return the unused funds. All these comments added pressure on the U.S. dollar as the continuous demand for a second stimulus bill weighed on local currency.

Daily Technical Levels

Support Resistance

104.13 104.54

103.95 104.77

103.72 104.95

Pivot point: 104.36

USD/JPY – Trading Tips

The USD/JPY is trading with a sideways trading range of 104.600 – 104.200, holding below an immediate resistance level of 104.600. On the lower side, the safe-haven currency pair may find support at the 103.719 level. The pair seems to disrupt the resistance level of 104.600, and if this happens, the USD/JPY may soar until the next resistance area of 105.030 level. The MACD and RSI support the buying trend, but we should only take buying positions over the 104.600 level today. Good luck!

Tags Daily Brief, EURUSD, Forex, Forex Trading, Fundamental Analysis, GBPUSD, Support and Resistance, Technical Outlook, Trade Setup, trading, USDJPY

Crypto Market Analysis

Daily Crypto Review, Dec 3 – PayPal and BlackRock Heads Extremely Bullish on Bitcoin; Crypto Sector Consolidating

Post author By Ilija Rankovic
Post date 3 December, 2020
No Comments on Daily Crypto Review, Dec 3 – PayPal and BlackRock Heads Extremely Bullish on Bitcoin; Crypto Sector Consolidating

The cryptocurrency sector has spent the day stabilizing after a sudden drop. Bitcoin is currently trading for $18,997, representing an increase of 0.48% compared to our last report. Meanwhile, Ethereum’s price decreased 0.64% on the day, while XRP managed to lost 0.01%.

Daily Crypto Sector Heat Map

Decred gained 39.22% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Elrond’s 30.56% and Curve DAO Token’s 10.36% gain. On the other hand, Nexo lost 5.60%, making it the most prominent daily loser. It is followed by Status’s loss of 2.72% and Augur’s loss of 1.66%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance hasn’t changed since we last reported, with its value currently staying at 62.3%. This value represents a 0% difference when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased significantly in the past 24 hours. Its current value is $571.05 billion, representing a $10.27 billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day recovering from yesterday’s pullback and trying to regain $19,000. However, this level has proven to be a solid resistance zone, and it is unsure whether Bitcoin will manage to push over it. On the other hand, the overall sentiment around the largest cryptocurrency by market cap is incredibly bullish, mostly due to the massive investments coming from the institutional side.

Bitcoin is very volatile and unpredictable at the moment, making the trades quite hard to pull off. Traders should pay attention to volume and watch smaller time-frames and enter trades with a high profit/loss ratio to mitigate the risk when things go bad.

BTC/USD 4-hour chart

Bitcoin’s short-term technicals are completely bullish, while its weekly and monthly technicals show some signs of neutrality alongside the overall bullishness.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):

Price is above its 50-period EMA and slightly above its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (54.55)
Volume is average

Key levels to the upside Key levels to the downside

1: $19,000 1: $18,790

2: $19,500 2: $18,500

3: $19,666 3: $18,240

Ethereum

Ethereum has spent the day mostly flat and hovering right under the $600 mark. The second-largest cryptocurrency by market cap has continuously failed to break the immediate resistance level but did not back down from it.

Ethereum traders have a good chance of catching a safe trade with a stop-loss slightly below $600 if Ether pushes above $600 (either because of its own price movement or as a response to Bitcoin breaking $19,000 with conviction).

ETH/USD 4-hour Chart

Ethereum’s daily and monthly technicals are completely bullish, while its 4-hour and weekly time-frames show some neutrality next to the overall bullishness.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is above its 50-period and at its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (54.35)
Volume is average

Key levels to the upside Key levels to the downside

1: $600 1: $510

2: $630 2: $500

3: $735 3: $490

Ripple

The fourth-largest cryptocurrency by market cap has had another slow day, with its price fluctuating between $0.6 and $0.64. The $0.6 support level seems to be holding quite well, while the $0.625 level got ignored several times, which made us remove it from the key levels section.

Trading XRP is almost impossible as the cryptocurrency currently has no volatility and (therefore) no trade opportunities.

XRP/USD 4-hour Chart

XRP’s daily and monthly technicals are completely bullish, while its 4-hour and weekly time-frames’ show bullish sentiment with a hint of neutrality.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is slightly above its 50-period EMA and at its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (51.08)
Volume is slightly below average

Key levels to the upside Key levels to the downside

1: $0.666 1: $0.6

2: $0.78 2: $0.596

3: $0.79 3: $0.535

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Crypto Market Analysis

Daily Crypto Review, Dec 2 – Traders Sell the News on ETH 2.0 Phase 0 Launch; Crypto Market in the Red

Post author By Ilija Rankovic
Post date 2 December, 2020
No Comments on Daily Crypto Review, Dec 2 – Traders Sell the News on ETH 2.0 Phase 0 Launch; Crypto Market in the Red

The cryptocurrency sector has dipped as the market entered a “selloff” mode the moment Ethereum’s 2.0 Phase 0 launched. The largest cryptocurrency by market cap is currently trading for $18,843, representing a decrease of 3.83% on the day. Meanwhile, Ethereum lost 2.83% on the day, while XRP managed to lost 6.17%.

Daily Crypto Sector Heat Map

SushiSwap gained 34.83% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Kusama’s gain of 10.74% and Ampleforth’s 9.05% gain. On the other hand, HedgeTrade lost 10.21%, making it the most prominent daily loser. It is followed by Horizen’s loss of 9.44% and Ethereum Classic’s loss of 8.77%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has decreased slightly since we last reported, with its value currently staying at 62.3%. This value represents a 0.1% difference to the downside when compared to yesterday’s value.

Daily Crypto Market Cap Chart

The crypto sector capitalization has decreased significantly in the past 24 hours. Its current value is $560.78 billion, representing a $17.09 billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day pulling back from its all-time highs and towards the $18,500 level. Its price formed a triangle formation on the 30-minute time-frame right after the price dump (which happened at the exact moment ETH 2.0 Phase 0 launched, as people were selling the news) and then broke it to the downside. Its price is now fighting for the $18,790 level (78.6% Fib retracement).

Bitcoin is quite volatile and unpredictable at the moment, but short trades in either direction could be viable. Traders should pay attention to volume and watch smaller time-frames and catch formations to trade off of them.

BTC/USD 30-minute chart

Bitcoin’s technicals on all time-frames are slightly tilted towards the buy-side. However, they show slight neutrality signs, except for the monthly overview, which is completely bullish.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):

Price is far above its 50-period EMA and at its 21-period EMA
Price is at its middle Bollinger band
RSI is near the overbought territory (52.95)
Volume is average

Key levels to the upside Key levels to the downside

1: $19,000 1: $18,790

2: $19,500 2: $18,500

3: $19,666 3: $18,240

Ethereum

Ethereum has, just like Bitcoin, pulled back as traders sold the news of ETH 2.0 Phase 0 launching. While its move wasn’t as pronounced, the second-largest cryptocurrency by market cap did lose quite a bit of value, as well as most likely confirmed its position below $600. The double top formation was confirmed, which added to the decisiveness of the drop.

Ethereum traders should pay close attention to Bitcoin’s movement, as it currently dictates the market direction regardless of what news moves the market (news on Bitcoin or any other altcoin).

ETH/USD 4-hour Chart

Ethereum’s daily and monthly technicals are completely bullish and show no signs of neutrality. However, its 4-hour and weekly time-frames’ sentiment is bullish but shows some neutrality.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is far above its 50-period and at its 21-period EMA
Price is at its middle Bollinger band
RSI is near being overbought (55.86)
Volume is average

Key levels to the upside Key levels to the downside

1: $600 1: $510

2: $630 2: $500

3: $735 3: $490

Ripple

The fourth-largest cryptocurrency by market cap had a pretty slow day, with its price hovering slightly above the $0.6 mark. Its price did feel the push towards the downside that the whole crypto sector experienced, but to a much lesser extent. XRP has found support at its 4-hour 50-period moving average, above which it is currently trading.

Trading XRP is almost certainly an inferior option to trading Bitcoin and Ethereum at the moment, as both the volume and volatility are low.

XRP/USD 4-hour Chart

XRP’s daily and monthly technicals are completely bullish and show no signs of neutrality. However, its 4-hour and weekly time-frames’ sentiment is bullish but shows some neutrality.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is slightly above its 50-period EMA and slightly below its 21-period EMA
Price is slightly below its middle Bollinger band
RSI is neutral (49.86)
Volume is below average

Key levels to the upside Key levels to the downside

1: $0.666 1: $0.625

2: $0.78 2: $0.596

3: $0.79 3: $0.535

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Market Analysis

Daily F.X. Analysis, December 02 – Top Trade Setups In Forex – Advance NFP in Focus!

Post author By Ali B.
Post date 2 December, 2020
No Comments on Daily F.X. Analysis, December 02 – Top Trade Setups In Forex – Advance NFP in Focus!

On Wednesday, the eyes will remain on the Fed Chair Powell Testifies, ADP Non-Farm Employment Change and Unemployment Rate from the Eurozone. A primary focus will remain on the ADP Non-Farm Employment Change as this will help investors determine the odds of actual NFP data, which is due on Friday.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD closed at 1.20715 after placing a high of 1.20764 and a low of 1.19243. The EUR/USD surged above 1.2000 level and reached 1.20764 level, the highest level since May 2018 amid the optimism surrounding the coronavirus vaccine and broad-based U.S. dollar weakness.

Many factors were involved in the breakout of the EUR/USD pair on Tuesday above the 1.2000 level, including the latest optimism because of vaccine hopes, monetary stimulus from both sides, and the political certainty for a change.

Pfizer and BioNtech were the first to report a high efficacy of 95% in a phase-3 coronavirus immunization trial on November 09. After that, many drug companies, including Moderna, AstraZeneca, Novavax, and Oxford University, also followed them. Pfizer and Moderna have already applied for emergency use authorization from the US FDA, and soon after getting the approval, these vaccines will be available for usage. Even Pfizer has sent its first mass shipment of vaccine to Chicago on Monday. All this vaccine optimism pushed the safe-haven U.S. dollar down and raised the risk sentiment in the market that supported the upward momentum of the EUR/USD pair on Tuesday.

On the stimulus front, the European Central Bank and the U.S. Federal Reserve were set to expand their bond-buying schemes. Since the pandemic has started, the stimulus aid from ECB has supported the Eurozone’s economy by allowing governments to spend more. In the United States, the Federal Reserve’s dollar printing triggered a broad risk-on mood that also helped the riskier assets like EUR/USD pair to rise.

On the Political certainty front, the U.S. elections have declared a final winner- Joe Biden. While outgoing President Donald Trump has been continuously crying foul, his attempts to overturn the elections failed, and investors continued to price the Joe Biden victory and selling the U.S. dollar. Moreover, the nomination of Janet Yellen as Treasury Secretary was also reassuring.

On the E.U. front, the political development in the upcoming Brexit deal has entered a tunnel as an intense final round of talks is in progress, and the results of talks are yet to be declared. All these factors combined and supported the EUR/USD pair’s upward momentum on Tuesday.

On the data front, at 13:15 GMT, the Spanish manufacturing PMI for November declined to 49.8 against the forecasted 50.8 and weighed on Euro. At 13:45 GMT, the Italian Manufacturing PMI also dropped to 51.5 against the projected 52.0 and weighed on the single currency. At 13:50 GMT, the French Final Manufacturing PMI raised to 49.6 from the expected 49.1 and supported Euro. AT 13:55 GMT, the German Final Manufacturing PMI stayed the same at 57.8. The German Unemployment Change came in as -39K against the expected 9K and supported the single currency. At 14:00 GMT, the Final Manufacturing PMI from the Eurozone remained flat with the expected 53.8. At 15:00 GMT, the CPI Flash Estimate for the year dropped to -0.3% against the estimated -0.2% and weighed n Euro. The Core CPI Flash Estimate for the year came in line as expected 0.2%.

On the U.S. front, at 20:00 GMT, the ISM Manufacturing PMI for November fell to 5.75 against the forecasted 5.9 and weighed on the U.S. dollar and supported the upward momentum of the EUR/USD pair. The Construction Spending for October surged to 1.3% against the estimated 0.8% and supported the U.S. dollar. The ISM Manufacturing Prices for November also surged to 65.4 against the forecasted 65.0 and helped the U.S. dollar. The Wards Total Vehicle Sales from the U.S. declined to 15.6M against the estimated 16.1M and weighed on the U.S. dollar that added further gains in EUR/USD pair.

Given the above manufacturing data, the Eurozone economy’s outlook looks somewhat better than the United States outlook that added extra pressure on the U.S. dollar and helped the EUR/USD pair to place highs above the 1.200 level on Tuesday.

Daily Technical Levels

Support Resistance

1.1971 1.2122

1.1873 1.2175

1.1819 1.12273

Pivot point: 1.2024

EUR/USD– Trading Tip

The EUR/USD surged dramatically on the back of risk-on sentiment amid positive reports over the COVID19 vaccine, which dragged the pair higher above the 1.2074 level. On the higher side, the violation of the 1.2010 resistance level is now working as a support, and it can lead the pair further higher until 1..2160. The bullish bias remains dominant today, especially over the 1.2015 level. However, the EUR/USD pair has recently formed a tweezers top pattern around 1.2076, suggesting the odds of bearish retracement. In this case, the EUR/USD can also drop until the support level of 1.2017 that marks 23.6% Fibonacci retracement. Let’s keep an eye on the 1.2060 support level today.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.34224 after placing a high of 1.34424 and a low of 1.33149. After placing losses for three consecutive days, the GBP/USD pair rose on Tuesday and recorded gains on the back of broad-based U.S. dollar weakness and increased Brexit hopes. The GBP/USD pair hit the highs at 1.3400 level on Tuesday over the positive Brexit news after the Times Radio’s Chief Political Commentator Tom Newton Dunn tweeted the U.K. and E.U. trade deal talks have entered a mythical tunnel. Though either side formally confirmed or rejected the “tunnel” status of negotiations after his tweet.

The tunnel refers to a state of intense negotiation that essentially ends up having some agreement between both parties, and before that, neither side leaves. Though it does not guarantee a deal will be made, it shows a strong willingness/commitment from both sides to work as hard as possible to get a compromise. After this tweet by Dunn, the GBP/USD pair started to gain traction and rise in the financial market due to increased demand for British Pound.

On the other hand, the GBP/USD pair’s gains could also be attributed to the U.S. dollar’s weakness. The greenback was weak across the board after the release of poor macroeconomic data and the rising number of coronavirus cases in the U.S.

The top U.S. health officials announced plans on Tuesday to begin vaccinating Americans against the coronavirus as early as mid-December amid the increasing death from coronavirus. The nationwide deaths hit the highest number for a single day in six months in the U.S. and raised economic recovery fears that led to the U.S. dollar’s weakness and improved GBP/USD pair.

On the data front, at 20:00 GMT, the ISM Manufacturing PMI for November declined to 5.75 against the estimated 5.9 and weighed on the U.S. dollar and supported the bullish momentum of the GBP/USD pair. For October, the Construction Spending rose to 1.3% against the projected 0.8% and helped the U.S. dollar. The ISM Manufacturing Prices for November also raised to 65.4 against the estimated 65.0 and supported the U.S. dollar. The Wards Total Vehicle Sales from the U.S. fell to 15.6M against the anticipated 16.1M and weighed on the U.S. dollar that added further gains in GBP/USD pair.

On Britain front, at 12:00 GMT, the Nationwide HPI for November raised to 0.9% against the forecasted 0.2% and supported the British Pound that added further gains in GBP/USD pair on Tuesday. At 14:30 GMT, the Final Manufacturing PMI also raised to 55.6 against the expected 55.2 and supported the British Pound that added further gains in GBP/USD pair.

Daily Technical Levels

Support Resistance

1.3316 1.3342

1.3301 1.3353

1.3290 1.3368

Pivot point: 1.3327

GBP/USD– Trading Tip

The GBP/USD is trading sideways, having violated the narrow trading range of 1.3397 – 1.3304. The market is expected to display choppy sessions with a new limited range of 1.3397 to 1.3452 level. The violation of a triple top resistance level of 1.3397 level is now working as a support, and it may trigger a bounce off in the Cable until 1.3452 and 1.3512 level. Let’s keep an eye on the 1.3397 level to stay bullish above this level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.305 after placing a high of 104.576 and a low of 104.180. The USD/JPY pair stayed on a bullish track on Tuesday despite the broad-based U.S. dollar weakness due to increased risk flow in the market. The stock markets have been buoyed by the news that the first coronavirus vaccine could be administered by the end of the year. Despite the acceleration of the pandemic in the U.S. and many other parts of the world, the riskier assets gained on the back of improved risk sentiment due to vaccine hopes. The U.S. Dollar Index (DXY) that measures the U.S. dollar value against the six currencies basket fell to 92 levels on Tuesday.

The pair rose above 104.5 level on Tuesday amid the broad-based risk sentiment in the market over the optimism surrounding the vaccine hopes. However, the gains in USD.JPY pair started to fade away in the late trading session after the US ISM Manufacturing PMI release for November. In November, the declining manufacturing activity was the proof of halted manufacturing activity due to the rising number of restrictive measures in many states of America due to escalated second wave of coronavirus.

At 04:30 GMT, the Unemployment Rate from Japan for October remained flat with the expectations of 3.1%. At 04:50 GMT, the Capital Spending for the quarter from Japan came in as -10.6% against the expected -12.0% and supported the Japanese Yen that limited the USD/JPY pair’s gains. AT 05:30 GMT, the Final Manufacturing PMI from Japan also raised to 49.0 against the expected 48.3 and supported the Japanese Yen that capped further gains in the USD/JPY pair.

On the U.S. dollar front, at 20:00 GMT, the ISM Manufacturing PMI for November fell to 5.75 against the projected 5.9 and weighed on the U.S. dollar that capped further gains in the USD/JPY pair. For October, the Construction Spending surged to 1.3% against the estimated 0.8% and supported the U.S. dollar and added gains in the USD/JPY pair. The ISM Manufacturing Prices for November also rose to 65.4 against the expected 65.0 and helped the U.S. dollar that added additional gains in the USD/JPY pair. The Wards Total Vehicle Sales from the U.S. dropped to 15.6M against the expected 16.1M and weighed on the U.S. dollar that capped further gains in the USD/JPY pair.

Meanwhile, the U.S. death rate because of the COVID-19 virus has also increased to an alarming level as it posted the highest number for a single day in six months. The Top U.S. health official announced plans on Tuesday to begin vaccinating Americans against the coronavirus as early as mid-December. This statement also raised the risk sentiment and added weight on the Japanese Yen that supported the USD/JPY pair’s upward momentum on Tuesday.

Furthermore, On Tuesday, Federal Reserve Chairman Jerome Powell said that the United States economy’s outlook was extraordinarily uncertain due to increased numbers of coronavirus cases that have affected the U.S. economy hardly.

In his testimony to the U.S. Senate Committee on Banking, Housing and Urban Affairs, Powell said that the increasing number of COVID-19 cases in the U.S. and abroad were concerning. He said that until the people were confident about re-engaging the economic activities confidently, full economic recovery was impossible. At the same time, Powell was upbeat over the recent optimistic news on vaccine development worldwide.

Meanwhile, several programs set by the Federal Reserve in March are near to end of the year. In response to this, Powell stated that these programs would help unlock almost $2 trillion funding. After this report, the USD/JPY pair started losing its early daily gains as the greenback became weak across the board due to rising hopes for stimulus measure.

Furthermore, On Tuesday, the outgoing Treasury Secretary Steven Mnuchin also testified before the Senate and urged lawmakers to pass a second stimulus bill quickly. This also added in the U.S. dollar weakness and capped further gains in the USD/JPY pair on Tuesday.

Daily Technical Levels

Support Resistance

104.03 104.16

103.97 104.23

103.91 104.29

Pivot point: 104.10

USD/JPY – Trading Tips

Tags Daily Brief, EURUSD, Forex, Forex Trading, Fundamental Analysis, GBPUSD, Technical Analysis, Technical Outlook, Trade Setup, trading, USDJPY

Forex Fundamental Analysis

Everything About ‘Economy Watchers Current Index’ Economic Indicator

Post author By Reddy Shyam Shankar
Post date 1 December, 2020
No Comments on Everything About ‘Economy Watchers Current Index’ Economic Indicator

Introduction

It has long been posited that in any economy, the first people to experience growth or contraction are those who provide basic-everyday services to the households. These service providers are considered to be “in touch” with the realities of the economy since they directly interact with their customers. While most people do not pay close attention to this index, its fluctuations could provide valuable insights into the economy.

Understanding Economy Watchers Current Index

For this analysis, we will focus on the Japanese Economy Watchers Current Index. This index attempts to measure the present economic conditions in Japan, especially from the perspective of households. From its name ‘economy watchers,’ it directly measures the mood of businesses who are in constant touch with the final consumers.

The index is compiled by surveying about 2050 employees in every sector of the economy. Here is the list of the sectors surveyed in the economy.

In household activity related sectors
- Retail establishments like supermarkets and automobile sellers
- Food and beverage establishments like restaurants
- Services to households such as transportation, telecommunication, and leisure facility operators
- Housing services
Corporate activity related sectors, including:
- Operators in the manufacturing sectors
- Employees and operators in the nonmanufacturing sector
- Employees in the primary sectors like agriculture, mining, and fishing
Employee-related sectors such as;
- Temporary labour placement agents
- Job magazine editors
- Staffing agencies
- Professionals who understand labour market trends

In all the above sectors, the data is compiled as per the regions in which it was collected. It is to say that the survey is divided based on the area being surveyed in japan. It covers the 11 regions in Japan.

The people who are surveyed are well-placed in positions that enable them to observe first-hand the changes in economic activities. These are the questions that the survey asks.

How they assess the current economic conditions and detailed reasons for their answer
Their assessment of future economic conditions and their reasons for this assessment

The survey is conducted monthly from the 25^th to the end of that month. Note that the Japanese Cabinet Office selects regional research organisations to administer these surveys. Based on the responses obtained, a ‘diffusion index’ is compiled. This diffusion index is then converted into a percentage to give the Japanese Economy Watchers Current Index. Here’s how the responses are weighted in the diffusion index.

Better is +1
Slightly better is +0.75
Unchanged is +0.5
Slightly worse is +0.25
Worse is 0

Using Economy Watchers Current Index in Analysis

Any value above 50 indicates that respondents are optimistic about the future, while values below 50 show that they are pessimistic. Now, note that a rise in the Economy Watchers Current Index doesn’t mean that all sectors of the economy are optimistic. It just means that majority of the sectors in the economy are optimistic.

For example, economy watchers in every other sector might be optimistic, but those in the nonmanufacturing sectors are pessimistic. This scenario means that majority of economy watchers are optimistic. Similarly, when the Economy Watchers Current Index shows pessimism about the economy, it doesn’t mean that every sector in the economy shows pessimism. Some economy watchers could be optimistic.

When the economy watchers are optimistic about the future, it means that they expect the economy to grow. Remember that these economy watchers are sampled from virtually every sector of the economy in every region of Japan. For example, let’s say that economy watchers in the manufacturing sector are optimistic about the economy.

This means that they expect the manufacturing sector to expand, which means that the output from the sector will increase. Going back to the basic knowledge of the economy, we know that suppliers and producers take their cue from consumers. Therefore, an increase in production in the manufacturing sector, or any other sector, means that consumer demand has also increased.

Let’s think of the factors that drive an increase in consumer demand. The primary factor is the increase in money supply in the economy, which is driven by easy access to cheap finance or an increase in the employment rate. Here, consumers have increased disposable income, which means that the economy is expanding.

Conversely, when the Economic Watchers Current Index is decreasing and showing increased pessimism, it could mean that the economy is contracting. Let’s use the example of household activity related sectors. When they are pessimistic, it means that they are experiencing a shortfall in demand for their goods and services. Since we have established that household demand drives these sectors, a decrease in demand could mean that households are cutting back on their expenditures.

This reduction in consumption is a direct consequence of lower disposable income in the economy. When households have reduced disposable income, they will prioritise expenditure on only the most essential goods and services. It means that consumer discretionary industries will take a hit, as will the overall economy – GDP will fall as the economy contracts.

Observe in the graphs below that the fall in the Japanese Economy Watchers Current Index corresponds to the drop in Japanese GDP in Q1 2020.

Source: Trading Economics

Source: St. Louis FRED

Impact of the Japanese Economy Watchers Current Index on the JPY

We have seen that the Economy Watchers Current Index can directly be linked to the money supply in the economy.; which means it can also be used as a leading indicator of inflation.

When the Economy Watchers Current Index is continually rising, it can be taken as a sign that there is increasingly more money supply in the economy. In this case, governments and central banks might step in to implement contractionary policies like hiking interest rates. In the forex market, this will increase the value of JPY. Conversely, when the Economy Watchers Current Index steadily drops, it might trigger expansionary policies, which will make the JPY depreciate.

Data Sources

The Cabinet Office of Japan is responsible for the survey and publication of the Japanese Economy Watchers Current Index. In-depth and historical data is also available at Trading Economics.

How the Japanese Economy Watchers Current Index Affects The Forex Price Charts

The recent publication from the Cabinet Office of Japan was on October 8, 2020, at 2.00 PM JST. The release is available at Investing.com. The publication of the Japanese Economy Watchers Current Index is expected to have a low impact on the JPY.

In September 2020, the Japanese Economy Watchers Current Index was 49.3 compared to 43.9 in August 2020.

Let’s find out how this release impacted the JPY.

AUD/JPY: Before Japanese Economy Watchers Current Index Release on 
October 8, 2020, just before 2.00 PM JST

The AUD/JPY pair was trading in a weak uptrend before the publications of the Japanese Economy Watchers Current Index. The 20-period MA was merely slightly rising with candles forming just above it.

AUD/JPY: After Japanese Economy Watchers Current Index Release on 
October 8, 2020, at 2.00 PM JST

The pair formed a 5-minute “Doji” candles immediately after the publications of the index. Since the index showed pessimism in the Japanese economy, the JPY is expected to be weaker compared to the AUD. As expected, the pair subsequently traded in a renewed uptrend with the 20-period MA steeply rising and candles forming further above it.

Bottom Line

The article has shown the importance of the Economy Watchers Current Index in the Japanese economy. More so, the significance of the index has been evidenced by the price chart analysis. Note that although the index is usually a low-impact indicator. However, its significance is observed in the current coronavirus pandemic since it can be used as a leading indicator of economic recovery.

Tags Current Index, Economic Indicators, Economy Watchers Current Index, Education, Forex, Forex Fundamental Analysis, Forex Fundamental Indicator, Forex Trading, Fundamental Analysis, Macro Economics, trading

Forex Videos

EUR/USD This Week’s Forecast!

Post author By Keiran
Post date 1 December, 2020
No Comments on EUR/USD This Week’s Forecast!

https://youtu.be/8HCMaiNPpyk

Where next for the EURUSD pair?

Thank you for joining this forex academy educational video.

In this session, we will be looking at the EURUSD pair.

This is a daily chart for the pair, which shows that the bulls are in control and pushing the pair up to the key 1.20 level from the current 1.1961 at the time of writing.

This week’s broad dollar weakness has pushed the dollar index under the key 92.00 level, has certainly helped to give the euro a lift. However, while publicly declaring a neutral stance on the strength of the euro, the ECB will no doubt privately be hoping for or a decline, simply for export reasons while the Euro area is still in the grips of the pandemic, and where the recovery path is muted.

Some analysts believe that the current level of ECB monetary easing policy is discounted in the pair’s exchange rate and believe that leveraged investors are reluctant to continue long positions from these highs……

….and where the market saw a distinct pullback from the 1.2016 level to 1.1607 at the beginning of August 2020. Certainly, If the big guns stop buying because of these reasons, price action will stall at the key 1.2000 level for a second time, and a reversal would follow

Other fundamental risks include a new US president in the waiting and whereby President Biden’s post-inauguration monetary policies will directly affect the markets and especially US stock markets and the value of the dollar, whose decline has helped lift the Euro in recent months and where the Covid relief financial stimulus package has been a long time in coming.

Also is the conundrum of the ongoing Brexit free trade agreement negotiations between the EU and UK. A failure to reach an agreement in what is seen as the eleventh-hour talks, before the end of the transition period on the 31st of December, would mean increased tariffs between the EU and UK where the EU exports than it imports, and which would be potentially harmful for the ailing EU economy. This would affect the value of the euro negatively.

Now let’s look at the technical risks.

The daily chart clearly shows a support line at the key 1.1600 area, and we are very close two a retest of the key 1.200 line to the upside. Should that happen, we will have had two attempts at a support line and two attempts at a resistance line, which will give us a confirmed sideways range for the pair. The risk for bulls is a potential double top formation, with its danger of a reversal. The previous 300 pip, reversal as shown, must be a warning sign for buyers.

The next test would be price action moving above the 1.20 line, pulling back to it, and finding support there, potentially leading to a higher continuation.

Traders should look to use the 1 and 4-hour charts to gain an intraday perspective of what is happening around this key 1.2000 level, to ascertain if it will become an area of support or resistance while factoring in the very risky fundamental reasons as previously alluded to.

Tags Education, Forex, Forex Trading, Fundamental Analysis, Technical Analysis

Forex Elliott Wave Forex Market Analysis

Is AUDUSD Turning Bearish?

Post author By Eduardo Vargas
Post date 1 December, 2020
No Comments on Is AUDUSD Turning Bearish?

In our previous technical analysis of the AUDUSD pair, we mentioned the potential corrective formation that was developing. In particular, we warned about the progress of an incomplete fourth wave of Minute degree identified in black, in which the pair was advancing on the wave (b) of Minutette degree in blue.

In our previous technical analysis of the AUDUSD pair, we mentioned the potential corrective formation that was developing. In particular, we warned about the progress of an incomplete fourth wave of Minute degree identified in black, in which the pair was advancing on the wave (b) of Minutette degree in blue.

Technical Overview

As the previous chart shows, the price action seems moving in a mid-term sideways channel. This formation has been evolving since early September, when the price topped at 0.74134. In terms of the Elliott Wave theory, the figure shows the progression of a likely incomplete flat pattern (3-3-5).

In this context, the bearish rejection below September’s high of 0.74134 should confirm the end of wave (b), in blue, and the beginning of wave (c). Also, according to Elliott’s textbook, the coming wave (c) should follow an internal sequence subdivided into five waves.

The big picture of the AUDUSD pair currently reveals the gray box’s rejection suggested in our previous analysis. From here, the Aussie could start to decline in a five-wave sequence corresponding to the already mentioned wave (c) of Minuette degree, labeled in blue.

Moreover, after wave (c) completes, the Australian currency should also end its wave ((iv)) of Minute degree in black and giving way to a new impulsive wave corresponding to the fifth wave of the same degree.

Short-term Technical Outlook

The AUDUSD price exposed in the next 2-hour chart reveals the completion of wave c of Subminuette degree identified in green, which topped at 0.74076 on November 30th, as the price action developed an ending diagonal pattern.

Once the price touched the psychological barrier of 0.74, the price began to decline, developing a breakdown below the baseline of the ending diagonal pattern, piercing the demand zone between 0.73492 and 1.73571, where the Aussie started a consolidation in the current trading session.

Considering that the pair started to consolidate, we expect an intraday sideways formation, likely a flag pattern. In this context, if the price breaks and closes below the baseline of this flag pattern, the AUDUSD could confirm the bearish continuation, which could make it drop to the next demand zone between 0.72654 and 0.72801.

Likewise, the price could extend its declines toward the next demand zone between 0.71449 and 0.71651. The movement, developed into a five-wave sequence, should complete the wave (c) of Minuette degree identified in blue, which, at the same time, could confirm the end of wave ((iv)) of Minute degree labeled in black, as we said earlier.

The invalidation level corresponding to this downward scenario is placed at the high of wave c, in green, 0.74076.

Tags audusd, Elliott Wave Analysis, Flag Pattern, Flat Pattern, Forex, Forex Trading, Fundamental Analysis, Price Action, Supply and Demand Zone, Technical Outlook, trading

Forex Course

184. Why Is It Important To Be Careful While Trading the News?

Post author By Reddy Shyam Shankar
Post date 1 December, 2020
No Comments on 184. Why Is It Important To Be Careful While Trading the News?

Introduction

Now that you know about scheduled news releases in the forex market, you must be excited. You probably think that you have the most foolproof way of trading in the forex market. You might have even gone to the extent of planning your trades to coincide with the high-impact indicators; because they significantly affect price action, you can collect a lot of pips.

Well, if you have thought and planned all that, forget it! To successfully trade the news in the forex market, you have to be deliberately methodical and calculative. If not, you may end up wiping out your trading account.

We’re not saying that you shouldn’t trade the news. Quite the opposite, you should, but only, and only when you understand the implications of the news release. Let’s, for example, take the release of a high-impact economic indicator.

Usually, when high-impact economic indicators are released, they are followed by extreme market volatility. The US unemployment rate is a high-impact indicator. Its latest release on October 2, 2020, at 8.30 AM EST came in positive at 7.9% lower than the expected 8.2%.

In this case, you’d expect the USD to be stronger than the EUR. But immediately after the news was released, there was some volatility that made the pair gain 11 pips before adopting a bearish trend.

Eleven pips may not sound like a lot. But if you have a small trading account and using high leverage, the chances are that 11 pips in the wrong direction can wipe you out.

Watch out for geopolitics

When trading the news as scheduled in the economic calendar, it pays to monitor geopolitical developments that are not scheduled, especially in the current climate of trade wars. Declarations by influential political figures may influence trends in the forex market. In such cases, if the news release of economic indicators coincides with such events, their impact may be watered down or exacerbated.

Another reason why trading the news may not go as planned is because the outcome of a news release could already be priced into the market. Forex traders are skillful at anticipating – especially when it comes to interest rate releases. If they anticipate that central banks are going to cut interest rates, they will adjust their trades weeks or months in advance. In this case, when the actual rates are released, their impact will not be as pronounced.

Bottom Line

We’re not saying you shouldn’t trade the news. Just take your time and familiarize yourself with the different types of economic indicators. Do thorough backtesting and have a trading plan on how you will incorporate news releases into your trading.

[wp_quiz id=”94056″]

Tags Caution, Education, Forex, Forex Course, forex news, Forex Trading, Fundamental Analysis, trading, Trading news, Unemployment Rate

Forex Signals

EUR/JPY Bullish Engulfing Signals Further Buying – Quick Signal Update!

Post author By Ali B.
Post date 1 December, 2020
No Comments on EUR/JPY Bullish Engulfing Signals Further Buying – Quick Signal Update!

During Tuesday’s early European trading session, the EUR/JPY currency pair managed to extend its overnight bullish streak and drew some further bids around closer to the 125.00 level mainly due to the market risk-on mood, which tends to undermine the safe-haven Japanese yen and contributes to the currency pair gains. Hence, the market trading sentiment was being supported by the prospects of a COVID-19 vaccine.

Across the pond, the shared currency upticks also played a significant role in underpinning the currency pair. On the contrary, the long-lasting coronavirus woes in the U.S. and Europe keep challenging the upbeat market sentiment, which becomes the key factor that kept the lid on any additional gains in the currency pair.

On the contrary, the intensifying coronavirus woes across the globe and intensifying lockdowns restrictions in Europe and the U.S. keep challenging the upbeat market performance and become the key factor that kept the lid on any additional gains in the currency pair.

In the absence of the key data/events on the day, the market traders will keep their eyes on US ISM Manufacturing PMI for November and original comments from the Fed Chair’s Testimony for fresh impetus. In addition to this, the updates about the U.S. stimulus package will also be key to watch. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will not lose their importance.

Daily Support and Resistance
S1 122.99
S2 123.8
S3 124.11
Pivot Point 124.62
R1 124.93
R2 125.44
R3 126.25

The EUR/JPY has violated the resistance level of 124.780, and above this, the pair has the potential to go after the 125.530 level. However, if the EUR/JPY pair fails to stay over 124.750 support, the odds of bearish reversal will also remain solid. The leading indicator, such as MACD is supporting the buying trend. Checkout a trade setup below.

Entry Price – Buy 124.898

Stop Loss – 124.498

Take Profit – 125.298

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Tags EUR/JPY, Forex, Forex Trading, Fundamental Analysis, Support and Resistance, Technical Analysis, Technical Outlook, Trade Setup

Forex Market Analysis

Daily F.X. Analysis, December 01 – Top Trade Setups In Forex – Manufacturing PMI Figures in Highlights!

Post author By Ali B.
Post date 1 December, 2020
No Comments on Daily F.X. Analysis, December 01 – Top Trade Setups In Forex – Manufacturing PMI Figures in Highlights!

Eyes will remain on the series of Manufacturing PMI figures from the Eurozone, UK, Canada, and the U.S. Although it is a low impact event, it may help determine the market sentiment today. The U.S. Fed Chair Powell will be in highlight as he is due to testify on the CARES Act before the Committee on Banking, Housing, and Urban Affairs, in Washington DC. Lastly, the ECB President Lagarde is also due to speak at an online event hosted by the Atlantic Council; however, it is now expected to significantly influence the Euro.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD closed at 1.19547 after placing a high of 1.20030 and a low of 1.19235. The currency pair EUR/USD surpassed the 1.20000 level on Monday amid the rising risk sentiment in the market and decreasing U.S. dollar; however, the pair started to lose its gains and ended up posting losses for the day.

The EUR/USD pair continued its bullish movement in the early trading session on Monday as the risk sentiment improved with more positive news from the coronavirus vaccine side. Pfizer has sent the first mass shipment of its vaccine to Chicago on Monday. Whereas, Moderna has applied for emergency use authorization of its vaccine from the US FDA on Monday. Both these latest reports from the vaccine side added further strength in the risk sentiment as it showed progress in steps that would eventually lead to global economic recovery.
The improved risk sentiment because of optimism regarding vaccine and economic recovery gave strength to riskier assets like EUR/USD pair on Monday.

Meanwhile, the U.S. dollar’s weakness also played an essential role in raising the currency pair EUR/USD above the 1.2000 level. The U.S. dollar was weak across the board due to the latest announcement that Congress has started its brief session to pass the next stimulus package for coronavirus.

Furthermore, both sides’ macroeconomic data were also in favor of pushing the currency pair EUR/USD near its mid-August high level on Monday. From the European Union side, The German Prelim CPI for November came in as -0.8% against the forecasted -0.7% and weighed on the single currency Euro. At 13:00 GMT, Spanish Flash CPI for the year came in as -0.8% against the forecasted -0.9% and supported Euro. At 15:00 GMT, the Italian Prelim CPI for November came in as -0.1%against the forecasted -0.2% and supported the single currency Euro.

On the U.S. dollar front, At 19:45 GMT, the Chicago PMI for November dropped to 58.2 against the anticipated 59.4 and weighed on the U.S. dollar. At 20:00 GMT, the Pending Home Sales for October fell to -1.1% against the estimated 1.1% and weighed on the U.S. dollar. However, the gains in the EUR/USD pair failed to remain till the end of the trading day and started to reverse in late trading hours amid the concerns of coronavirus pandemic in Europe. The outlook for the largest economy in the Eurozone, Germany, became increasingly uncertain due to the rising number of coronavirus cases surpassed above 1 Million.

Daily Technical Levels

Support Resistance

1.1962 1.1976
1.1954 1.1982
1.1948 1.1991
Pivot point: 1.1968

EUR/USD– Trading Tip

The market’s technical side remains mostly unchanged on the back of a limited number of economic events on the calendar. The EUR/USD pair is trading with a bullish bias at the 1.1955 area, facing immediate resistance at the 1.2000 area. Closing of candles above the 1.1915 support level suggests odds of bullish bias in the EUR/USD as this level is extended by an ascending triangle breakout pattern. On the lower side, the EUR/USD may find support at the 1.1912 and the 1.1865 areas; however, bullish bias remains stable over the 1.1912 level.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.33229 after placing a high of 1.33856 and a low of 1.32911. The GBP/USD pair tried to rise and post gains for Monday but failed to do so and continued its bearish streak for the third consecutive day. The rise in GBP/USD pair in the earlier trading session on Monday was due to the hopes that there was little progress in Brexit talks between U.K. and E.U. to settle disputes on several issues, including the fishing quotas.

The rise in British Pound was due to the latest comments from French European Affairs Minister Clement Beaune. On Monday, he said that he hoped to see an agreement in the next few days and called on negotiators to leap required. He acknowledged that two sticking issues, U.K. fishing waters and the so-called level-playing field for business, are still unresolved.

As both sides have already warned each other that the time was running out, a French presidency official said on Monday that Britain should clarify its positions and consult to find a Brexit deal on its association with the European Union. He added that the E.U. also has the interest to fight for, to give fair competition for its businesses and fishermen. He said that the Union has made a clear and balanced offer for a future partnership with Britain and that the E.U. will not accept a substandard deal that would not respect the E.U.’s interests.

On the other hand, Boris Johnson’s officials believed that the Brexit trade deal could be reached within days if both sides continue working in good faith to resolve fishing rights’ big obstacle. The U.K.’s Foreign Secretary Dominic Raab called on the E.U. to recognize that regaining control over British waters was the question of sovereignty for Britain. He said that talks were going good and he believed a deal on fish might be achievable during the final week of talks.

These optimistic and hopeful comments from both sides added strength to the GBP/USD pair on Monday during the early trading session. Still, the currency pair failed to maintain its gains and started to decline and post losses for the day despite the broad-based U.S. dollar weakness due to insufficient macroeconomic data on the day.

On the U.S. dollar front, at 19:45 GMT, the Chicago PMI for November fell to 58.2 against the estimated 59.4 and weighed on the U.S. dollar. At 20:00 GMT, the Pending Home Sales for October also declined to -1.1% against the projected 1.1% and weighed on the U.S. dollar that capped further losses in GBP/USD pair.

From the Britain side, at 14:30 GMT, the M4 Money Supply for October from Britain was dropped to 0.6% against the forecasted 1.0% and weighed on British Pound and added further losses in GBP/USD pair. The Net Lending to Individuals for October also declined to 3.7B against the expected 4.7B and weighed on British Pound and supported the bearish momentum in GBP/USD pair. At 14:32 GMT, Mortgage Approvals for October raised to 98K against the anticipated 85K and supported British Pound and capped further losses in the currency pair.

Meanwhile, the GBP/USD pair’s bearish trend was continued for the third consecutive day because of the rising fears that the U.K. and E.U. will end up having no-deal at the end of the transition period that is due on December 31. Only a month has left behind to resolve both parties’ issues, and none of them has shown any lenience. If both sides failed to reach a deal by the end of the deadline, then the U.K. will be forced to trade with the E.U. under the World Trade Organization terms that will not be good for both sides.

Daily Technical Levels

Support Resistance

1.3316 1.3342
1.3301 1.3353
1.3290 1.3368
Pivot point: 1.3327

GBP/USD– Trading Tip

The GBP/USD is trading sideways, within a narrow trading range of 1.3397 – 1.3304. The market is likely to exhibit choppy sessions until this narrow trading range gets violated. On the higher side, the GBP/USD is facing a triple top level at the 1.3397 level; however, the bullish breakout of the 1.3397 level can trigger a buying trend until the 1.3454 level. On the lower side, the Cable is supported over 1.3350 level, supported by an upward channel on the four hourly charts. The MACD suggests a buying trend, and we should look for a buy trade over the 1.3325 level or 1.3400 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.289 after placing a high of 104.384 and a low of 103.830. After placing losses for two consecutive days, the USD/JPY pair rose on Monday as the U.S. dollar rebounds.

The broad-based U.S. dollar weakness in the early trading session pushed the USD/JPY pair lower after the hopes for the U.S. stimulus measure raised. However, Wall Street’s main indexes’ poor performance allowed the U.S. dollar to remain firm against its peers. The Dow Jones Industrial Average and the S&P 500 indexes lost about 1.2% and 0.78% respectively on Monday, which added strength to the U.S. dollar and pushed the USD/JPY pair higher.

Meanwhile, on Monday, US Health Secretary Alex Azar said that Americans could get their first shot of coronavirus vaccine before Christmas if all thing went well. These comments from Azar added further strength in risk-sentiment and weighed on the safe metal Japanese Yen that added gains in USD/JPY pair. Furthermore, on Monday, Moderna applied for emergency authorization with the U.S. Food and Drug Administration to start using its vaccine to reduce the effect of coronavirus. Pfizer and BioNtech, which has already filed for similar FDA approval earlier this month, sent the first mass shipment of its COVID-19 vaccine to Chicago through United Airlines on Friday. This positive news from the drug companies added optimism in the market and weighed on the safe-haven Japanese Yen that added further gains in the USD/JPY pair.

On the data front, at 04:50 GMT, the Prelim Industrial Production for October from Japan raised to 3.8% against the forecasted 2.3% and supported the Japanese Yen that capped further gains in the USD/JPY pair. The Retail Sales for the year from Japan stayed the same as expected by 6.4%. At 10:00 GMT, the Housing Starts for the year came from Japan came in as -8.3% against the forecasted -9.0% and supported the Japanese Yen.

On the U.S. dollar front, at 19:45 GMT, the Chicago PMI for November declined to 58.2 against the expected 59.4 and weighed on the U.S. dollar that capped further gains in the USD/JPY pair. At 20:00 GMT, the Pending Home Sales for October fell to -1.1% against the estimated 1.1% and weighed on the U.S. dollar that capped further gains in the USD/JPY pair.
Another factor involved in the risk sentiment that supported the upward momentum of the USD/JPY pair on Monday was the start of a brief session of Congress over the issue of a second stimulus bill for the coronavirus pandemic. The Democrats and Republicans were under dispute over the size of the stimulus package, and now that the Presidency has shifted from Republicans to Democrats after the victory of Joe Biden, it could be expected that a massive stimulus is on its way that would curb the effects of COVID-19 and support the risk sentiment of the market. The improved risk demand added pressure on the safe-haven Japanese yen and supported the USD/JPY pair on Monday. Another factor involved in the gains of the US/JPY pair was Pfizer’s vaccine’s shipment to Chicago on Monday, along with the latest application by Moderna to FDA for emergency use authorization of its vaccine.

Daily Technical Levels

Support Resistance

104.03 104.16
103.97 104.23
103.91 104.29
Pivot point: 104.10

USD/JPY – Trading Tips

The USD/JPY is trading with a sideways trading range of 104.475, holding below an immediate resistance level of 104.478. On the lower side, the safe-haven currency pair may find support at the 103.719 level. The pair seems to disrupt the resistance level of 104.478, and if this happens, the USD/JPY may soar until the next resistance area of 105.030 level. The MACD and RSI support the buying trend, but we should only take buying positions over the 104.500 level today. Good luck!

Tags Daily Brief, EURUSD, Forex, Forex Trading, Fundamental Analysis, GBPUSD, Technical Analysis, Technical Outlook, trading, USDJPY

Crypto Market Analysis

Daily Crypto Review, Dec 1 – Bitcoin’s New Monthly All-Time High; Ethereum 2.0 Phase 0 Launches Today

Post author By Ilija Rankovic
Post date 1 December, 2020
No Comments on Daily Crypto Review, Dec 1 – Bitcoin’s New Monthly All-Time High; Ethereum 2.0 Phase 0 Launches Today

The cryptocurrency sector has pushed further up as Bitcoin made a new all-time high for a moment. The largest cryptocurrency by market cap is currently trading for $19,443, representing an increase of 5.03% on the day. Meanwhile, Ethereum gained 3.45% on the day, while XRP managed to gain 3.78%.

Daily Crypto Sector Heat Map

BitTorrent gained 18.25% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Litecoin’s gain of 11.22% and Decentraland’s 7.69% gain. On the other hand, Numeraire lost 4.81%, making it the most prominent daily loser. It is followed by Waves’ loss of 5.78 and Zilliqa’s loss of 3.36%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has increased slightly since we last reported, with its value currently staying at 62.4%. This value represents a 0.7% difference to the upside compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased significantly in the past 24 hours. Its current value is $577.86 billion, representing a $24.86billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the day continuing its push towards the upside, even posting a new all-time high (on most exchanges) for a moment as it reached $19,864 on Bitstamp. However, the 20,000 mark and BitMEX’s $20,093 remain untouched. With the buys on exchanges and derivatives markets and institutional investments, a strong all-time high might be posted extremely soon.

Bitcoin trading is quite hard at the moment simply due to how the cryptocurrency moves. Still, traders can squeeze a profit if they trade along with the main trend and long Bitcoin when the volume increases.

BTC/USD 4-hour Chart

Bitcoin’s technicals on all time-frames are tilted towards the buy-side but show slight neutrality signs, or even slight signs of bearishness.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):

Price is far above both its 50-period EMA and its 21-period EMA
Price is near its top Bollinger band
RSI is near the overbought territory (69.43)
Volume is average

Key levels to the upside Key levels to the downside

1: $19,500 1: $19,000

2: $19,666 2: $18,790

3: $20,000 3: $18,500

Ethereum

Ethereum has, just like Bitcoin, continued its climb up. However, the move has stopped slightly below its most recent highs, topping at $617.87. The second-largest cryptocurrency by market cap now has two scenarios to play out:

It can create a double top and start moving back towards the supporting levels;
It can continue moving up on fundamentals and break the recent high and the recent trading patterns it created.

Ethereum’s current fundamental outlook is extremely bullish due to its Phase 0 of Ethereum 2.0 launching. This, along with Bitcoin moving towards the upside, has made trading any potential pullbacks quite impossible due to the amount of potential risk such trade would carry.

ETH/USD 4-hour Chart

Ethereum’s 4-hour, daily, and monthly technicals are extremely bullish and show no signs of neutrality. On the other hand, its weekly time-frame’s sentiment is bullish but shows some neutrality.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is far above both its 50-period and its 21-period EMA
Price is near its top Bollinger band
RSI is near being overbought (68.63)
Volume is average

Key levels to the upside Key levels to the downside

1: $600 1: $510

2: $630 2: $500

3: $735 3: $490

Ripple

The fourth-largest cryptocurrency by market cap has tried moving up, as well, but in a much tamer manner. XRP has established its presence above $0.625 and pushed towards $0.666, which stopped the move. XRP will most likely continue trading in a range-bound by $0.666 to the upside and either $0.625 or $0.596 to the downside

Trading XRP is quite difficult at the moment, and trading Bitcoin or Ethereum is potentially more profitable and slightly more straightforward.

XRP/USD 4-hour Chart

XRP’s technicals on the 4-hour and weekly time-frames are bullish but show some signs of neutrality. On the other hand, its daily and monthly overviews are completely bullish.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is above its 50-period EMA and slightly above its 21-period EMA
Price is between its middle and top Bollinger band
RSI is neutral (60.95)
Volume is average

Key levels to the upside Key levels to the downside

1: $0.666 1: $0.625

2: $0.78 2: $0.596

3: $0.79 3: $0.535

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Videos

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

Post author By Keiran
Post date 30 November, 2020
No Comments on Forex Forecast – Will We See A Rising Dollar As The Stock Markets Crash?

https://youtu.be/9rcYwv67xSQ

Where next for the US Dollar?

Thank you for joining this Forex Academy Educational video

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

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

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

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

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

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

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

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

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

Tags Dollar, Education, Forex, Forex Trading, Fundamental Analysis, Stock market, trading

Forex Fundamental Analysis

Does ‘Retail Sales Monitor’ (RSM) Economic Indicator Impacts The Forex Market?

Post author By Reddy Shyam Shankar
Post date 30 November, 2020
No Comments on Does ‘Retail Sales Monitor’ (RSM) Economic Indicator Impacts The Forex Market?

Introduction

The level of demand can be said to be the primary driving factor in any economy. In the long run, the fiscal and monetary policies that are implemented by governments and central banks can be traced back to the aggregate demand within the economy. The consumption by households accounts for over 65% of the national GDP. Since retail sales account for most of the consumption by households, monitoring retail sales data can provide a useful predictor of the GDP and inflation.

Understanding Retail Sales Monitor

The Retail Sales Monitor is a precise measure of the performance in the retail sector. The RSM is measured monthly in the UK by the British Retail Consortium (BRC), whose participating members represent about 70% of the UK’s retail industry.

Source: The UK Office for National Statistics

The BRC is comprised of over 170 major retailers and thousands of independent retailers. The BRC member businesses have sales of over £180 billion and with 1.5 million employees. Since the RSM measures the change in the actual value of same-store sales in BRC-member retail outlets in the UK, the data can be used as a confident measure of the UK’s retail sector health and the broader economy.

In the UK, the retail sector is the largest employer in the private sector, which means that tracking the retail sector changes gives an overview of the economy and business cycles and insights into the labor market.

Using Retail Sales Monitor in Analysis

The RSM data couldn’t be more relevant in the current climate of Coronavirus afflicted economy and post-Brexit operating environment. Here are some of the ways this data can and is used for analysis.

In any economy, growth is driven by demand. Household purchases account for over 65% of the GDP, which makes the RSM data a vital leading indicator of economic health. When the retail sales monitor shows an increase in households’ consumption, it means that more money is circulating in the economy.

Several factors can be attributed to increased demand by households. Firstly, increased employment levels in the economy or an increase in real wages mean that the economy’s overall disposable income also increases. As a result, households can now consume more quantities of goods and services. More so, the increased disposable income tends to lead to the flourishing of discretionary consumer industries and a general rise in the aggregate demand.

An increase in aggregate supply leads to the expansion of production activities hence overall economic growth. Secondly, increased demand can be a sign of easy access to affordable funding by the households. Generally, if households and businesses have easy access to cheaper financing sources, it forebodes an increase in economic activities, which leads to economic expansion.

As an economic indicator, the retail sales monitor can be used as an authoritative leading indicator of recessions and recoveries since its data covers over 70% of the retail sector. For example, when the economy is at its peak, it is characterized by RSM’s historical highs and lower unemployment levels. When the RSM begins to drop consistently, this can be taken as a sign that the economy is undergoing a recession. The period of recession is characterized by an increase in the rate of unemployment and lower disposable income, which makes households cut back on their consumption and prioritize essential goods and services.

Source: Retail Economics

Conversely, when the economy is at its lowest during recessions or depressions, it is characterized by historical lows RSM and a higher unemployment rate. In this scenario, when the RSM begins to rise steadily, it could be taken as a sign that the economy is undergoing recovery. This period will be marked by improving labor market conditions hence increased demand that drives the RSM higher.

Using the RSM as a leading indicator of recessions and recoveries can help governments and central banks implement fiscal and monetary policies. When the RSM drops and shows signs that the economy could be headed for a recession, expansionary fiscal and monetary policies could be implemented. These policies will help to stimulate the economy and avoid depression.

On the other hand, when the RSM is continually rising at a faster rate, contractionary monetary and fiscal policies could be implemented. These policies are meant to mop up excess liquidity of the money supply and increase borrowing costs, thus avoiding an unsustainable rate of inflation and an overheating economy.

Impact on Currency

There are two main ways in which the RSM data can impact a country’s currency. By showing the economic growth and as an indicator for potential monetary and fiscal policies.

When the RSM has been steadily increasing, forex traders can anticipate that contractionary policies will be implemented to avoid unsustainable economic growth. One of such policies involves interest rate hikes, which make the currency appreciate relative to others. Conversely, expansionary monetary and fiscal policies can be anticipated in the event of a persistent drop in the RSM. Such policies include cutting interest rates, which depreciates the local currency.

The currency can be expected to be relatively stronger when the RSM is increasing. In this case, economic conditions are improving, unemployment levels are dropping, and a general improvement in households’ welfare. On the other hand, a dropping RSM is negative for the currency because it is seen as an indicator of a contracting economy and worsening labor conditions.

Sources of Data

In the UK, the RSM data is collated by the British Retail Consortium and KPMG. The data is published monthly by the British Retail Consortium.

How Retail Sales Monitor Data Release Affects Forex Price Charts

The recent publication of the retail sales monitor data was on October 12, 2020, at 11.00 PM GMT and accessed at Forex Factory.

The screengrab below from Forex Factory; as can be seen, a low impact on the GBP is expected when the RSM data is published.

In September 2020, the BRC increased by 6.1%. This change was greater than the 4.7% change recorded in August 2020 and higher than the analysts’ expectation of a 3.5% change. Theoretically, this positive RSM is expected to have a positive impact on the GBP.

Let’s see how this release impacted the GBP/USD forex charts.

EUR/USD: Before the Retail Sales Monitor Release on October 12, 2020, 
Just Before 11.00 PM GMT

Before the publication of the RSM data, the GBP/USD pair was trading in a neutral pattern. As shown by the 5-minute chart above, the 20-period MA had flattened with candles forming just around it.

EUR/USD: After the Retail Sales Monitor Release on October 12, 2020, 
at 11.00 PM GMT

The pair formed a 5-minute ‘Inverted Hammer’ candle after the RSM data publication. However, the release of the data did not have any noticeable impact on the pair. The GBP/USD pair continued trading in the previously observed neutral trend with the 20-period MA still flattened.

Bottom Line

Most forex traders tend to pay attention to the retail sales data, which is usually scheduled for ten days after the RSM publication. The retail sales data are considered to cover the entire economy hence the low-impact nature of the retail sales monitor as an indicator in the forex market.

Tags Economic Indicators, Education, Forex, Forex Drivers, Forex Fundamental Analysis, Forex Trading, Fundamental Analysis, fundamental indicator, Macro Economics, Retail Sales Monitor, RSM, trading

Forex Course

183. Introduction To Trading The ‘News’

Post author By Reddy Shyam Shankar
Post date 30 November, 2020
No Comments on 183. Introduction To Trading The ‘News’

Introduction

The forex market, or any other financial market, is always driven by sentiment. And by sentiment, we mean; investors will only pay what they believe an asset is worth. More so, their investment decisions are primarily ‘future-looking,’ meaning that the types of trades they make will reflect their expectations about the value of the asset they trade.

So, what drives the price of currency pairs in the forex market?

The simplest answer is the fundamentals of a country. Let’s revisit the forex basics here for a bit. The price of a currency pair is the exchange rate between two currencies. This price doesn’t just move up and down arbitrarily. It is determined by the economic value of either country – what is called fundamentals. You might be tempted to think that technical indicators drive price action in forex. Quite the opposite – almost all the time, the technical indicator follows the news.

So, when one country’s fundamentals improve or are believed to improve, the value of its currency will increase relative to other currencies. Similarly, when the country’s fundamentals deteriorate or are expected to worsen, the currency will depreciate.

Remember the laws of demand and supply. When the demand is high, prices tend to go up, and when demand falls, prices fall along with it. The same applies to the forex market. When fundamentals improve or are expected to improve, the currency is in high demand making its value increase. When fundamentals worsen or are expected to, traders dump the currency as its value drops.

So, how do forex traders know if the fundamentals of the country have improved or worsened? News! News, as always, is the carrier of everything.

Where to find News in the Forex Market?

In the forex market, news can be delivered in various ways. There are hundreds, if not thousands, of organizations and government agencies that publish various economic indicators. But don’t worry, you won’t have to go through thousands of webpages just to find relevant news regarding the currency pairs you are trading. Things are a bit neat in the forex market when it comes to news releases. The economic calendar simplifies things for you. Here, you will find virtually every scheduled publication of economic indicators from every country! This way, you get to know what’s happening and when it is happening.

Here’s a screengrab of an economic calendar.

Furthermore, these scheduled releases have been categorized depending on the magnitude of their impact. Of course, not all economic indicators impact a currency the same way. Some have negligible effects.

[wp_quiz id=”94071″]

Tags Appreciation, Depreciation, Education, Forex Course, Forex Trading, Fundamental Analysis, news, Technical indicators, trading, Trading news

Forex Market Analysis

Daily F.X. Analysis, November 30 – Top Trade Setups In Forex – ECB President Lagarde Speaks!

Post author By Ali B.
Post date 30 November, 2020
No Comments on Daily F.X. Analysis, November 30 – Top Trade Setups In Forex – ECB President Lagarde Speaks!

On the news front, the eye will remain on the ECB President Lagarde Speaks, OPEC Meetings, Chicago PMI, and Pending Home Sales m/m. The U.S. events are expected to perform badly, and the dollar index can bear a bearish hit.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.19637 after placing a high of 1.19637 and a low of 1.19060. EUR/USD pair raised near its highest level since August amid the increasing risk-on sentiment. Due to Thanksgiving celebrations, the EUR/USD pair continued to move higher in the upward direction in the absence of U.S. traders.

The risk perceived EUR/USD pair gained traction on Friday after the optimism surrounding the market related to the coronavirus vaccine increased. The hopes for a quick economic recovery also increased along with the vaccine progress and supported the market’s risk sentiment that lifted the global equity market on Friday.

The news regarding vaccines from several candidates and their efficacy rates raised hopes that the economy would come back to its pre-pandemic levels, and that weighed on the safe-haven greenback. The U.S. dollar was also weak across the board after the smooth transition of the White House. Joe Biden is set to take power on January 20, and he is expected to work on a second stimulus bill that would weigh on the U.S. dollar.

The U.S. Dollar Index (DXY) that measures the U.S. dollar value against the six currencies basket was also under pressure and at a new monthly low level at 91.8 level on Friday. The U.S. dollar weakness combined with the vaccine optimism added strength in the EUR/USD pair and helped it reach near its highest since mid-August level.

Meanwhile, the single currency Euro was also strong on Friday after releasing strong macroeconomic data from the European Union. At 12:00 GMT, German Import Prices for October raised to 0.3% against the expected 0.1% and supported Euro. At 12:45 GMT, the French Consumer Spending for October also raised to 3.7% from the forecasted 3.6% and supported the single currency Euro. The French Prelim CPI for November surged to 0.2% against the forecasted 0.0% and supported Euro. The French Prelim GDP for the quarter also surged to 18.7% against the anticipated 18.2% and supported Euro. The Euro’s strength added further gains in the already rising EUR/USD pair and pushed it higher on board.
The rising risk sentiment in the market also supported the stock market worldwide as the outlook of the upcoming year 2021 was improved due to the successful development of the coronavirus vaccine.

Furthermore, the victory of Joe Biden in the U.S. Presidential elections also added positivity to the market mood because he has signaled a more promising approach toward international relations, unlike Trump. Due to his promise of keeping smooth trade relations with China and other countries, the favorable global trade conditions improved the global risk sentiment and supported the riskier assets like EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1885 1.1934

1.1859 1.1957

1.1836 1.1983

Pivot point: 1.1908

EUR/USD– Trading Tip

The EUR/USD pair is trading with a bullish bias at the 1.1974 area, facing immediate resistance at the 1.1975 area. Closing of candles below this level suggests chances of bearish correction as the pair has entered the overbought zone. However, the bullish breakout of the 1.1975 level can extend the buying trend until the next resistance level of the 1.2010 level. The bullish bias remains dominants today. Let us consider taking a selling trade below the 1.1979 level, and above this, the next target stays at 1.1997.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.33066 after placing a high of 1.33815 and a low of 1.32856. The GBP/USD pair continued its previous day’s bearish move and extended its losses on Friday amid the increased Brexit worries. Despite the positive risk environment in the market, the currency pair GBP/USD pair posted losses for the day on Friday as the deadline for the transition period was coming closer day by day, and a deal has still not been secured. With only 34 days left for the Brexit-transition period to end, the pressure on both sides, the E.U. and the U.K., has increased to reach a deal by Saturday to complete the required paper-work legislation process in time.

Chief EU negotiator Michel Barnier reached London for in-person talks after completing his quarantine, and this was the only positive news surrounding Brexit. UK PM Boris Johnson has said that the U.K. will prosper with or without a deal, and the likelihood of a deal is dependent on the E.U. There were still disagreements on Fisheries, governance, and level playing field that needed to sort out to reach a deal.

The rising uncertainty regarding Brexit has been weighing on the local currency British Pound. The E.U. Commission President Ursula von der Leyen, along with the E.U. chief negotiator Barnier, said that they do not know if a deal was possible as the talks were in progress.

On Friday, Barnier told MEPs that he was prepared for a further four days of make-or-break Brexit negotiations, with growing skepticism among E.U. member states about the utility of further talks. Barnier has said that he would work through the weekend and then maybe one-or-two more days in the last-ditch attempt to bridge the large gaps between both sides and reach a deal.

E.U. sources have said that there was a growing feeling that the lack of progress and the need to prepare businesses for the consequences of a no-deal British departure from the E.U. made it unwise for talks to continue beyond then. These concerning statements from both sides have weighed on British Pound and added losses in GBP/USD pair.
Whereas, the U.K.’s foreign minister Dominic Raab said on Sunday that the next week would be very significant for Brexit, in reply to how near the deadline was in trade talks with the European Union. He said that this was a very significant week, the last real major week, subject to further postponement.

As the last 4-6 days for securing a Brexit deal have reached, the local currency pressure also increased and weighed on Sterling that ultimately weighed o GBP/USD pair ahead of any decision despite the improved risk sentiment in the market because of vaccines progress.

Daily Technical Levels

Support Resistance

1.3319 1.3397
1.3281 1.3437
1.3241 1.3475
Pivot point: 1.3359

GBP/USD– Trading Tip

The GBP/USD traded in line with our previous forecast to hit the support level of 1.333, which is extended by an upward channel. On the higher side, Cable may find resistance at 1.3400 level that’s extended by the double top pattern on the two-hour timeframe. Simultaneously, the bullish crossover of the 1.3400 level is likely to open additional room for buying until the 1.3446 level. On the 4 hour timeframe, the GBP/USD pair has formed a bullish channel that supports the pair at the 1.333 area, and violation of this level on the lower side can drive a sharp selling trend until the 1.3270 mark. The RSI and MACD are suggesting a selling trend in sterling. However, I will prefer to open a buying trade over the 1.3330 area and selling trade below the same level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.064 after placing a high of 104.279 and a low of 103.904. Despite the improved risk-on market sentiment, the USD/JPY pair dropped for the second consecutive session amid the U.S. dollar weakness. The U.S. dollar weakness was driven by the increased expectations of a large-scale stimulus from the new Biden administration to combat the coronavirus pandemic. Joe Biden has been fighting to provide massive stimulus support to the economy to fight against the COVID-19 pandemic. As he has won the U.S. Presidential elections and is now due to take power on January 20, the chances for a massive stimulus fiscal support to the economy has increased and weighed on the U.S. dollar.

The U.S. Dollar Index (DXY) that tracks the greenback against a basket of six other currencies was down by 0.1% to a 3-months lower level at 91.8. The trade market volume was also limited, keeping the U.S. dollar under pressure due to Thanksgiving Holiday in the U.S. as many traders were enjoying a long weekend.

Meanwhile, the environment around U.S. politics also got better with President Trump’s latest decision to leave office regarding Electoral College votes for Biden. This smooth transition of power in the White House also supported the risk-on market sentiment and weighed over the safe-haven greenback that added losses in the currency pair USD/JPY.
Furthermore, on the data front, at 04:30 GMT, the Tokyo Core CPI for the year came in as -0.7% against the expected -0.6% and weighed on the Japanese Yen and capped further losses in the USD/JPY pair on Friday.
The risk-on market sentiment failed to impress the USD/JPY buyers. The traders were more focused on the U.S. dollar’s weakness instead of the rising optimism surrounding the global economic recovery due to vaccine development.

Several candidates worldwide, including Pfizer & BioNtech, Moderna, and AstraZeneca, have reported a 60-95% efficacy rate of their vaccine ad said that it would be available for use within weeks as some have applied for US FDA approval for emergency authorization use.

AstraZeneca vaccine is considered the cheapest vaccine as it can be stored at ordinary room temperature or refrigerator temperature, but it requires two dosages to reach a 90% efficacy rate. The hopes for global economic recovery and the outlook for 2021 have improved and weighed on the safe-haven U.S. dollar that ultimately added pressure on the USD/JPY pair.

Daily Technical Levels

Support Resistance

104.27 104.63

104.09 104.79

103.92 104.98

Pivot point: 104.44

USD/JPY – Trading Tips

The USD/JPY pair’s recent price action has violated the choppy trading range of 104.700 – 104.056. On the lower side, the USD/JPY pair can drop further until the next support level of 103.667 level, especially after the breakout of the 104.150 support level. On the higher side, a bullish breakout of 104.700 resistance can extend the buying trend until the next resistance area of 104.700 and 105.063 level. On the lower side, the support continues to hold around the 103.667 level. The MACD suggests selling bias in the USD/JPY pair; thus, we should consider selling trade below 104.150 and buying above the same. Good luck!

Tags Daily Brief, EURUSD, Forex, Forex Trading, Fundamental Analysis, GBPUSD, Support and Resistance, Technical Outlook, trading, USDJPY

Crypto Market Analysis

Daily Crypto Review, Nov 30 – Ethereum Soars on Great Fundamentals; Bitcoin Bulls Back in the Game

Post author By Ilija Rankovic
Post date 30 November, 2020
No Comments on Daily Crypto Review, Nov 30 – Ethereum Soars on Great Fundamentals; Bitcoin Bulls Back in the Game

The cryptocurrency sector has spent the weekend regaining what was lost during the crash on Nov 25. Almost every single cryptocurrency in the top100 ended up being in the green. The largest cryptocurrency by market cap is currently trading for $18,369, representing an increase of 4.43% on the day. Meanwhile, Ethereum gained 9.79% on the day, while XRP managed to gain 6.67%.

Daily Crypto Sector Heat Map

Kusama gained 19.14% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Ampleforth’s gain of 16.24% and Zilliqa’s 13.48% gain. On the other hand, Numeraire Coin lost 5.56%, making it the most prominent daily loser. There were no other cryptocurrencies in the top100 that lost over 1% of its value.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has decreased slightly since we last reported, with its value currently staying at 61.7%. This value represents a 0.5% difference to the downside compared to the value it had on Friday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased significantly over the weekend. Its current value is $553.00 billion, representing a $38.14 billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has spent the weekend recovering from the Nov 25 crash. The price was slowly going up over the weekend, creeping up to and past $18,000 once again. The largest cryptocurrency by market cap is currently between its 61.8% and 78.6% Fib retracement levels, and a break to either side of this range may determine its short-term fate.

Bitcoin’s short-term future will greatly depend on if it breaks its immediate support or resistance level. In both cases, a strong rally towards that side may form, so traders should be prepared to “catch” the trade quickly.

BTC/USD 1-hour Chart

Bitcoin’s daily, weekly, and monthly technicals are tilted towards the buy-side but show slight neutrality signs. On the other hand, its 4-hour technicals are completely bullish.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):

Price is above both its 50-period EMA and its 21-period EMA
Price is near its top Bollinger band
RSI is neutral (62.26)
Volume is average

Key levels to the upside Key levels to the downside

1: $18,500 1: $17,850

2: $18,790 2: $17,450

3: $19,000 3: $17,000

Ethereum

Ethereum has, just like Bitcoin, been climbing back and trying to reach its recent highs. The second-largest cryptocurrency by market cap is currently fighting to pass the 78.6% Fib retracement level, sitting at $592.5. If this level gets conquered with conviction, we may expect another run past $600.

Ethereum’s current fundamental outlook is very bullish due to its Phase 0 of Ethereum 2.0 launching. This, combined with Bitcoin moving towards the upside, has made trading any potential pullbacks impossible due to how risky it would be.

ETH/USD 4-hour Chart

Ethereum’s 4-hour, daily, and monthly technicals are completely bullish and show no signs of neutrality. On the other hand, its sentiment seen in the weekly time-frame’s is bullish but shows some neutrality.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is far above both its 50-period and its 21-period EMA
Price is at its top Bollinger band
RSI is near being overbought(68.26)
Volume is average

Key levels to the upside Key levels to the downside

1: $600 1: $510

2: $630 2: $500

3: $735 3: $490

Ripple

The fourth-largest cryptocurrency by market cap has spent the weekend trying to maintain its level after a small rally that took its price from $0.55 to $0.65. XRP seems to be trading in a range, bound by the 38.2% Fib retracement ($0.582) and 61.8% Fib retracement ($0.657).

Trading XRP may not be optimal as trading Bitcoin, or Ethereum is potentially more profitable and slightly more straightforward.

XRP/USD 2-hour Chart

XRP’s technicals on shorter time-frames (4-hour and daily) are extremely bullish, while its weekly and monthly overviews show some signs of neutrality and bearishness (though they are still bullish).

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is above its 50-period EMA and slightly above its 21-period EMA
Price is between its middle and top Bollinger band
RSI is neutral (58.86)
Volume is average

Key levels to the upside Key levels to the downside

1: $0.657 1: $0.625

2: $0.711 2: $0.582

3: $0.79 3: $0.535

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Fundamental Analysis

Analysing The Impact Of ‘Wholesale Trade Sales’ On The Forex Market

Post author By Reddy Shyam Shankar
Post date 29 November, 2020
No Comments on Analysing The Impact Of ‘Wholesale Trade Sales’ On The Forex Market

Introduction

When it comes to households’ consumption, the retail sales data is usually considered the best leading indicator. Most people rarely have wholesale trade sales in mind. However, the importance of wholesale trade sales data should not be underestimated. Whenever retailers face an increase in demand by consumers, their next stop is to the wholesalers. Furthermore, when retailers anticipate increased demand, they stock up directly from wholesalers. Thus, wholesale trade sales data can be used as a leading indicator of retail sales and the overall demand in the economy.

Understanding Wholesale Trade Sales

A wholesaler is a business whose core operations strictly involve selling to institutions, governments, or other businesses. A wholesaler rarely deals with the end consumer. Wholesalers usually conduct their businesses from warehouses and do not market their services to households. Their place in the supply chain is to provide retailers and vendors with goods.

As an economic indicator, the wholesale trade sales measures the monetary value of the inventories and sales made by registered wholesalers over a particular period.

How are the Wholesale Trade Sales Measured?

In the US, the Census Bureau conducts a sample survey to determine the national wholesale trade sales and publishes its findings in the ‘Monthly Wholesale Trade: Sales And Inventories’ report. This report contains end-of-month inventories, monthly sales, and inventories-to-sales ratios. These aspects of the reports are segmented by the type f business that the wholesale operates. Some of the wholesalers covered by the report include; jobbers or wholesale merchants, exporters and importers, and distributors of industrial goods. The report excludes agents who market products for mining firms, refineries, and manufacturers.

The samples contained in the monthly report are selected through the strata design, which is defined by the type of business sampled and the annual sales for the businesses. In this report, wholesalers of all sizes are included. It is updated quarterly to capture the changes in the sector.

Since the sampling method is used to create the final monthly report, the estimates on the inventories and sales are arrived at by the summation of the collected, weighted data. These estimates are then seasonally adjusted and benchmarked to the annual surveys. Note that the report is susceptible to sampling and non-sampling errors.

Using Wholesale Trade Sales for Analysis

The wholesale trade sales data can be used as a leading indicator of retail sales and consumer spending, estimated to drive up to 70% of the GDP.

Source: St. Louis FRED

The wholesale sector is an integral intermediary in the distribution of goods to the final consumer. Therefore, an increase in sales can be seen as an increase in demand by households. As an economic indicator, this increase could signal that the welfare of households is improving and they have more disposable income hence the increase in demand. The increased disposable income could result from increased employment levels in the economy or higher wages received by households. In either scenario, more money is circulating in the economy. It shows that the economy is expanding.

On the other hand, if the wholesale sales are continually decreasing, it could be considered a sign of depressed demand in the economy. The decrease in demand might be resulting from the lower circulation of money in the economy. An increase in unemployment levels or a decrease in household wages can be attributed to the depressed demand. In this instance, it shows that the economy is contracting.

Suppliers and manufacturers can also use wholesale sales data to determine their level of output to match the demand, hence avoid distorting the equilibrium prices. When wholesale trade sales are increasing, the manufacturers and producers will increase their output to match the level of demand in the economy. When the sales are increasing more than the inventories, producers, and manufacturers will have to scale up their production. Increasing production entails hiring more labor hence a decrease in the unemployment levels. This instance shows that the overall economy is expanding.

Conversely, when inventories are increasing more than the wholesale sales, it indicates that demand is falling. The producers and manufacturers will be forced to scale down their operations to avoid having excess supply than demand, which will distort the market prices. As a result, jobs will be lost in the economy making households worse off. Furthermore, corporate profits will b expected to take a hit.

Impact on Currency

Economic growth and the rate of inflation are the two ways wholesale trade sales data can impact the forex market.

An increase in wholesale sales shows that there is an increase in aggregate demand. In this case, the economy is poised to perform well in the coming months, with discretionary sectors flourishing. The increased demand drives the economic growth towards expansion, which might be accompanied by increased demand-driven inflation. Therefore, in the forex market, a sustained increase in wholesale trade sales can be seen as a potential trigger of contractionary monetary and fiscal policies. These policies are implemented to ensure that economic growth is within sustainable levels and the rate of inflation stays below the target rate. As a result, the currency appreciates relative to others.

Conversely, a continuous decline of the wholesale trade sales will lead to the depreciation of the currency. In the forex market, falling wholesale trade sales show a decline in the aggregate demand, which might result in deflation and, eventually, a stagnating economy. To prevent this from happening, governments and central banks might adopt expansionary fiscal and monetary policies. Although these policies are meant to stimulate the economy, they result in the depreciation of the currency.

Sources of Wholesale Trade Sales Data

The US Census Bureau publishes the monthly ‘Wholesale Trade: Sales And Inventories’ report. St. Louis FRED publishes a comprehensive historical coverage of wholesale trade sales in the US.

Source: St. Louis FRED

How Wholesale Trade Sales Data Release Affects The Forex Price Charts?

The US Census Bureau published the latest monthly ‘Wholesale Trade: Sales And Inventories’ report on October 9, 2020, at 10.00 AM EST. This released can be accessed at Investing.com. As shown by the screengrab below, low volatility is expected upon releasing the wholesale trade sales data.

In August 2020, wholesale trade sales grew by 1.4%. This growth was lower than the 4.8% growth recorded in July 2020 and lower than analysts’ expectation of a 2.0% growth.

Theoretically, this lower-than-expected growth should be negative for the USD.

Let’s see how this release impacted the EUR/USD forex charts.

EUR/USD: Before the Wholesale Trade Sales Data Release on October 9, 2020, 
Just Before 10.00 AM ET

The pair can be seen to be trading in a steady uptrend before the news release. The 20-period MA is steeply rising with candles forming above it.

EUR/USD: After the Wholesale Trade Sales Data Release on October 9, 2020, 
at 10.00 AM ET

After the news release, the EUR/USD pair formed a 15-minute bullish candle, as expected. This candle showed that the USD weakened against the EUR immediately, the worse than expected wholesale trade sales data was released. Subsequently, the pair continued trading in a renewed uptrend.

Bottom Line

Although the wholesale trade sales data is regarded as a low-impact economic indicator, it is significant in the current economy. The data can be used to show the rate of economic recovery after the coronavirus induced recession.

Tags Education, Forex, Forex Trading, Fundamental Analysis, Fundamental Trading, Macro Economic Indicator, Macro Economics, trading, Wholesale Trade Sales

Crypto Market Analysis

BTC/USD Weekly Chart Analysis + Possible Outcomes

Post author By Ilija Rankovic
Post date 28 November, 2020
No Comments on BTC/USD Weekly Chart Analysis + Possible Outcomes

In this weekly BTC/USD analysis, we will be taking a brief look at the most recent events, current chart technical formations, as well as the possible BTC short-term price outcomes.

Overview

Bitcoin has spent the past week experiencing a long-awaited pullback, after which it started consolidating. The largest cryptocurrency by market cap has dropped significantly and reached as low as $16,200 before bears reached exhaustion after failing to break its all-time high. While some analysts are calling for an end of the pullback, most of the data shows otherwise. First off, the current controversy around China seizing 1% of all Bitcoin is contributing towards the overall bearish sentiment. Second, a poll done on crypto investors says that the majority of investors believe that BTC will end up correcting as much as 40%. All this, plus the fact that Bitcoin couldn’t push past $17,260 for a couple of days now, is a testament to the short-term bearish sentiment.

On the other hand, people shouldn’t mistake this for a long-term bearish trend. In fact, Bitcoin has never been more bullish long-term.

Technical factors

Bitcoin has continued moving up and performed exactly what we called last week (a push towards the all-time high). Once again, as expected, the push didn’t break the all-time high and has triggered a strong pullback. Bears have reached exhaustion at just over $16,000 and Bitcoin has started consolidating in a range, bound by $17,260 (both horizontal resistance and a 100-period moving average) to the upside and $16,420 to the downside.

The hash ribbons indicator still shows a buy/accumulate signal as it points out to miner capitulation.

Likely Outcomes

Bitcoin’s movement is a bit less obvious this week when compared to the past weeks. The cryptocurrency has a couple of scenarios it can play out as it leaves the current range-bound trading.

1: If Bitcoin breaks the range to the downside (slightly less likely), its most likely target will be $15,500. Due to the short-term bearish sentiment surrounding Bitcoin at the moment, a short trade doesn’t have to be considered as “trading against the large trend” and may actually be a good profit-making opportunity.

In this case, a clear stop-loss should be set a little above $16,420.

2: The second (just slightly more likely) scenario happens if Bitcoin manages to break the $17,260 mark. In this case, the cryptocurrency can reach many targets, but will most likely pass the $17,600 immediate resistance and push higher. The next zone of resistance after that is the $18,250-$18,450.

Trading Bitcoin’s sideways action in a current range is not advised as the price could break out of it at any time.

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, Education, Fundamental Analysis, Technical Analysis, trading

Crypto Market Analysis

Daily Crypto Review, Nov 27 – Satoshi Nakamoto Emails Discovered; Crypto Market Consolidating

Post author By Ilija Rankovic
Post date 27 November, 2020
No Comments on Daily Crypto Review, Nov 27 – Satoshi Nakamoto Emails Discovered; Crypto Market Consolidating

The cryptocurrency sector has started its consolidation period after a bloodbath it experienced yesterday. The largest cryptocurrency by market cap is currently trading for $17,164, representing a decrease of 3.07 % on the day. Meanwhile, Ethereum is gaining 0.01% on the day, while XRP managed to gain 2.47%.

Daily Crypto Sector Heat Map

SushiSwap gained 31.44% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Aave’s gain of 15.05% and Nano’s 14.68% gain. On the other hand, Crypto.com Coin lost 10.20%, making it the most prominent daily loser. NEM lost 9.92% while OMG Network lost 9.43%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has stayed at the same place as yesterday, with its value currently staying at 62.2%. This value represents a 0% difference when compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has decreased significantly over the course of the day. Its current value is $511.86 billion, representing a $48.67 billion decrease compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap has triggered a rally towards the downside after creating a double top, which brought its price as low as $16,215. While some analysts say that the downturn is not over yet, Bitcoin has recovered slightly and is now consolidating just above the $17,000 mark.

While shorting Bitcoin could be a good profit-making opportunity if the downtrend continues, trading against the long-term trend is very risky. However, thinking about hedging against any downturns should be considered.

BTC/USD 1-hour Chart

Bitcoin’s daily and weekly technicals are tilted towards the buy-side and show no signs of neutrality. On the other hand, its monthly technicals show some signs of neutrality, while its 4-hour technicals are completely bearish.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

Price is far below its 50-period EMA and at its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (44.33)
Volume is average

Key levels to the upside Key levels to the downside

1: $17,450 1: $17,000

2: $17,850 2: $16,800

3: $18500 3: $16,350

Ethereum

Ethereum has experienced the same chain of events Bitcoin did in the past day or so. The downtrend ended up bringing Ethereum’s price back to as low as $480 before recovering. However, Ethereum’s ascending channel (yellow dotted) top line has stayed strong and triggered a mini-rally, which then brought the price above the red ascending line as well. Ethereum is now consolidating at around $515.

Ethereum’s current fundamental outlook is very bullish, but (as we said in our previous articles) any sharp move to the downside triggered by Bitcoin will affect Ethereum in a major way as well. This makes trading up hard, as one needs to constantly check Bitcoin’s price as well.

ETH/USD 1-hour Chart

Ethereum’s daily, weekly, and monthly technicals are completely bullish and show no or just slight neutrality signs. On the other hand, its sentiment seen in the 4-hour time-frame’s is completely bearish.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is far below its 50-period and at its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (44.53)
Volume is average

Key levels to the upside Key levels to the downside

1: $600 1: $510

2: $630 2: $500

3: $735 3: $490

Ripple

The fourth-largest cryptocurrency by market cap has posted lower highs three times in a row, with its lows testing the $0.625 support level each time the price went down. However, the third time XRP went towards this level, Bitcoin’s push towards the downside triggered XRP bears, which took over the market. The downturn ended at the $0.475 level, which held up quite nicely. XRP is now trading in the middle of a range, bound by $0.475 to the downside and $0.625 to the upside.

Trading XRP may not be optimal at the moment as trading Bitcoin is both potentially more profitable and a bit more straightforward.

XRP/USD 1-hour Chart

XRP’s technicals on all time-frames are bullish, with its daily time-frame being the only one not showing any signs of neutrality. The other time-frames show either slight neutrality or even slight bearishness.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is slightly below its 50-period EMA and at its 21-period EMA
Price is slightly above its middle Bollinger band
RSI is neutral (48.78)
Volume is slightly above average

Key levels to the upside Key levels to the downside

1: $0.625 1: $0.475

2: $0.79 2: $0.443

3: $0.963 3: $0.4

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Signals

GBP/USD Upward Trend in Play – Quick Update on Buy Signal!

Post author By Ali B.
Post date 27 November, 2020
No Comments on GBP/USD Upward Trend in Play – Quick Update on Buy Signal!

Our forex trading signal on the GBP/USD pair is doing well as the market has bounced off over the 1.3330 support level. On the higher side, Cable may find resistance at 1.3400 level that’s extended by the double top pattern on the two-hour timeframe. Simultaneously, the bullish crossover of the 1.3400 level is likely to open additional room for buying until the 1.3446 level. On the 4 hour timeframe, the GBP/USD pair has formed a bullish channel that supports the pair at the 1.333 area, and violation of this level on the lower side can drive a strong selling trend until the 1.3270 mark. The RSI and MACD are suggesting a selling trend in sterling. However, I will prefer to open a buying trade over the 1.3330 area today as the market has the potential to go after the 1.3400 level.

Stop Loss – 1.33319

Take Profit – 1.34119

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Tags Forex, Forex Trading, Fundamental Analysis, GBP-USD, Technical Outlook

Forex Market Analysis

Daily F.X. Analysis, November 27 – Top Trade Setups In Forex – French Events in Focus!

Post author By Ali B.
Post date 27 November, 2020
No Comments on Daily F.X. Analysis, November 27 – Top Trade Setups In Forex – French Events in Focus!

The economic calendar is a bit muted on the last trading day of the week as investors seem to enjoy the Thanksgiving holiday. However, France is due to report few low impact economic events such as French Consumer Spending with a positive forecast of 3.6% vs. -5.1%, Prelim CPI m/m with a neutral forecast of 0.0%, and Prelim GDP with a neutral growth rate forecast of 18.2% vs. 18.2%. These events are likely to have a muted impact on the market today.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.19123 after placing a high of 1.19406 and a low of 1.18850. EUR/USD pair hit a fresh 2-months high on Thursday in the early trading session and started to decline and ended up posting losses for the day after the German Consumer Confidence contracted.

At 12:00GMT, the German GfK Consumer Climate in November missed the market’s expectations and dropped to -6.7 against the expected -4.9 and weighed on Euro. At 14:00 GMT, the M3 Money Supply for the year from Eurozone remained flat at 10.5%. Private Loans for the year also came in line with the expectations of 3.1%.

The Eurozone’s largest economy, Germany, appeared to struggle to shake off the coronavirus crisis as consumers’ confidence declined. The investors became cautious about it. That weighed on the single currency Euro and added in the losses of EUR/USD pair.

Furthermore, the European Central bank (ECB) published its November policy meeting minutes in which the policymakers believe that there was the possibility that pandemic might have long-lasting effects. They were cautious that pandemics might take a toll on the demand side, supply sides and reduce the economy’s growth potential.

Minutes revealed that Inflation would remain negative for longer while employment could contract further. Policymakers believed that flexibility from PEPP was essential to its continued success, and they wanted to wait for a further fiscal response before reacting instead. They were of the review that more bond-buying may not have the same impact now. There were no surprises in the minutes as Central Bank has begun to pave the way towards additional easing next December.

The single currency Euro came under pressure after releasing these minutes from the European Central Bank and weighed on EUR/USD pair on Thursday. The U.S. markets were closed due to the Thanksgiving Holiday, and as Friday is not an official holiday, thin trading is expected to extend into the weekend.

Moreover, the currency pair also followed yesterday’s release of the flash US GDP data for the third quarter that remained low at 33.1% in annualized terms and raised concerns over the world’s largest economy. The coronavirus vaccine and the U.S. stimulus talks are considered as the prevailing risks to the Federal Reserve’s outlook going ahead.

The demand for safe-haven greenback continued to slip with the global economy’s improving outlook after the release of vaccines for a deadly virus. The weak U.S. dollar kept the losses in EUR/USD pair limited on Thursday.

Daily Technical Levels

Support Resistance

1.1885 1.1934

1.1859 1.1957

1.1836 1.1983

Pivot point: 1.1908

EUR/USD– Trading Tip

On Friday, the direct currency pair EUR/USD is trading with a bullish bias at the 1.1912 level, holding above an immediate resistance becomes a support level of the 1.1905 level. On the higher side, the EUR/USD pair may find resistance at 1.1979, and a bullish breakout of 1.199 level can extend the upward trend until 1.1942. On the 2 hour timeframe, the EUR/USD pair has violated the symmetric triangle pattern that was extending resistance at the 1.19052 level, and now this level is working as a support. Let’s consider taking a buying trade over the 1.1905 level, and above this, the next target stays at 1.1997.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.33550 after a high of 1.33974 and a low of 1.33218. GBP/USD pair struggled to surpass the 1.3400 level and was unable to do so during the early European session, and after that, sellers came in and reversed the pair’s movement to as low as 1.3320 level.

The GBP/USD pair was amongst the worst performers on Thursday out of the G10 currencies, with losses of around 40 pips on the day. After posting gains for four consecutive days, the GBP/USD pair declined on Thursday. Much of the GBP/USD pair’s bullish rally was due to the U.S. dollar’s weakness following the U.S. President-elect Joe Biden’s victory at the start of the month was also escalated by the combination of vaccine optimism and the increasingly dovish tone of the FOMC.

Federal Reserve is expected to squeeze their asset purchase program in December to offer the economy more stimulus because of the rising number of coronavirus cases across the States that has forced the local governments to impose a second lockdown, as the fiscal stimulus from Congress remains indefinable.

Meanwhile, British Pound has also performed significantly better during this month as the hopes surrounding the Brexit deal were higher after the French compromise over the fisheries issue. An agreement over one sticking point also revealed progress made in the Brexit agreement and supported the Sterling that added gains in GBP/USD pair. Furthermore, the vaccine development from Pfizer & BioNtech, Moderna, and AstraZeneca also gave strength to the GBP/USD pair after adding demand for the market’s risk sentiment.

However, on Thursday, the tone behind GBP/USD was changed somewhat after the hopes for a Brexit deal started to fade away. Many reports suggested that the remaining key sticking issues related to Ireland and level playing field were proving to be very hard to reach an agreement. During Thursday’s European session, the Irish Foreign Minister said that Brexit’s outstanding issues were proving to be complicated. E.U. sources also reported that talks between the E.U. and the U.K. were not going well. Simultaneously, the French Foreign Minister put public pressure on the U.K. to adopt a more realistic negotiating stance on Wednesday that faded the optimistic tone around the market and weighed on GBP/USD pair.

During the Thanksgiving Holiday in the U.S. and, in the absence of any macroeconomic data from the U.K., the GBP/USD pair continued following the latest headlines and dropped on Thursday.

Daily Technical Levels

Support Resistance

1.3318 1.3394

1.3282 1.3434

1.3242 1.3470

Pivot point: 1.3358

GBP/USD– Trading Tip

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.233 after placing a high of 104.479 and a low of 104.214. On Thursday, the U.S. dollar was down in early trading session subdued by weak U.S. economic data. The optimism surrounding the coronavirus vaccines prompted investors to seek out riskier assets instead of safe-haven. The U.S. Dollar Index (DXY) was down on Thursday against the basket of six major currencies by 0.3% at 91.97 level, the lowest level in more than two months as the volume was limited due to the holiday in the U.S. for Thanksgiving.

In late Wednesday, the Federal Reserve released the minutes of its last monetary policy meeting, and they showed that Fed members debated on a range of options on bond purchases to support the recovery, including pivoting to purchases of longer-term securities that could put more pressure on the dollar by keeping longer-term yield unattractively low. These comments from the Fed weighed on the U.S. dollar and added pressure on the USD/JPY pair on Thursday.

Meanwhile, the number of global coronavirus cases reached above 60 million on Thursday, out of which 12.7 million were from the U.S., according to Johns Hopkins University. Many states in the U.S. started to impose restrictive measures to curb the increasing numbers of coronavirus cases that led to more job losses, weighed on the U.S. dollar, and kept the USD/JPY pair under pressure.

Positive data from 3 vaccine candidates and their efficacies, along with a smoother transition to Joe Biden administration in the U.S., added pressure on the greenback and forced investors to move towards riskier currencies. Reports also suggested that the Fed’s monetary easing was on its way that continued weighing on the greenback and added pressure on the USD/JPY pair. Apart from this, a mixed performance in the European equity markets provided a modest lift to the safe-haven Japanese yen that ultimately contributed to the USD/JPY pair’s fall on Thursday.

Due to the absence of any macroeconomic data on the day and the thin liquidity conditions due to the Thanksgiving Holiday, the pair USD/JPY continued following the last day’s economic data of Unemployment claims that showed a negative labor market report and added pressure on the pair.

Daily Technical Levels

Support Resistance

104.27 104.63

104.09 104.79

103.92 104.98

Pivot point: 104.44

USD/JPY – Trading Tips

Tags Daily Brief, EURUSD, Forex, forex services, Forex Trading, Fundamental Analysis, GBP-USD, Support and Resistance, Technical Analysis, Technical Outlook, trading, USDJPY

Forex Fundamental Analysis

Impact of ‘Commodity Prices’ On The Forex Market

Post author By Reddy Shyam Shankar
Post date 26 November, 2020
No Comments on Impact of ‘Commodity Prices’ On The Forex Market

Introduction

Thanks to international trade, some countries prosper disproportionately than others. The disproportionality in the balance of payments is mostly owed to the type of exports a country produces. Countries that are net exporters of precious commodities tend to have a better balance of payment than net importers. For this reason, the fluctuation of these commodities tends significantly affect their economy.

Understanding Commodity Prices

A commodity can be defined as any physical product that can be traded in any form of exchange. With commodities, there is little differentiation, if any, regardless of where they originate. For example, we can say that an ounce of gold from South Africa is the same as an ounce of gold from Australia.

Naturally, different parts of the world are endowed with different types of natural resources. Furthermore, since commodities are inherently used to produce other goods and services, their value entirely depends on their rarity and demand. Take Copper and Wheat, for example. Both are commodities. But you cannot compare the value of a kilo of copper and a kilo of wheat. Copper is a rare and limited precious commodity, while wheat is readily cultivated. Therefore, a country that is a net exporter of copper will have a better balance of payment than a country that is a net exporter of wheat.

Furthermore, let’s take an example of country A with the largest deposit of commodity X in the world. In this case, country A is basically a monopoly; if it wanted to control the commodity prices, it would reduce the production of the commodity. By doing so, the demand for commodity X would exceed the supply, which means that country A will receive higher prices. Now, imagine a scenario where vast deposits of commodity X are discovered in country B. It now means that the supply of commodity X in the international market will increase, and as a result, the price of commodity X will decrease.

For countries whose economies heavily dependent on commodity exports, the fluctuation of commodity prices heavily impacts the earnings. Furthermore, the changes in the demand for these commodities also affect the GDP of these countries. Note that the price of these commodities also varies depending on their quality. For commodities which are used for trading in the future market, the minimum quality accepted is called the basis grade,

Using Commodity Prices in Analysis

The commodity prices usually tend to impact the economies which heavily rely on the export of commodities to fund public expenditures.

An increase in commodity prices means that the producing country will receive more income. In turn, this translates to increased wages for workers involved in the production or mining of the commodity. Since households are well compensated, their welfare will significantly increase. Note that for countries heavily dependent on commodity exports, these commodities’ mining or production usually employs a majority in the labor market. Therefore, an increase in wages will significantly impact the changes in the aggregate demand in the economy for consumer goods and services.

This increase in demand tends to lead to an increase in the production of consumer goods. As a result, there will be an expansion of the consumer industry. More so, the expansion of these sectors leads to more job creation hence lowering unemployment levels. Other sectors of the economy will also benefit from this increase in wages. The real estate sector will also flourish since the increase in wages means that households can now afford to fund the purchase of homes or qualify for mortgages.

Conversely, a decline in the prices of commodities means that the labor involved will be compensated lesser. The resultant effect will be a contraction in demand for consumer goods and services since households will be forced to prioritize expenditure on essential products. Consequently, the consumer discretion industry will contract as producers scale down operations to match the decreased demand. As a result, some jobs in these sectors will be lost, contributing to increased unemployment. Therefore, we can see there is a direct link between the changes in commodity prices to the growth of the domestic economy and changes in the domestic employment levels.

Let’s look at another scenario. Say the economy of country A is intertwined with that of country C – country A imports multiple commodities from country C. Since country A’s economy heavily relies on commodities, the prices of these commodities increase, which means that the balance of payment of country A improves and that its citizens are well off. Thus, country A can afford to import more products from country C. therefore, country C’s economy will prosper. Increased imports from A means that production in C will increase, expand its economy, and improve labor market conditions.

Conversely, when commodity prices fall, it means that economic conditions in country A might deteriorate. Consequently, imports from country C will decrease, leading to either C’s economy to contract or a slowdown in its growth. This is usually the case with Australia and New Zealand, whose economies are close to each other.

Source: St. Louis FRED

Therefore, commodity prices do not just affect the economy of countries whose exports are majorly comprised of commodities.

Impact on Currency

The impact of the changes in the commodity price in the forex market is pretty straightforward.

When a country exports a commodity to the international market, it is paid in its currency. Therefore, when the commodity prices increase, it means that the domestic currency will be in high demand. Importers of the commodity will have to convert more of their currencies into the domestic currency. As a result, the value of the domestic currency will appreciate relative to other currencies.

On the other hand, a fall in the commodity means fewer amounts of the domestic currency will be required to purchase the exports. Consequently, the domestic currency will marginally depreciate relative to others.

Sources of Data

In Australia, the Reserve Bank of Australia publishes the Index of Commodity Prices report monthly.

Source: RBA

Trading Economics has a comprehensive list of commodity prices in both the spot and futures market.

How Commodity Prices Data Release Affects The Forex Price Charts?

The latest publication of the Index of Commodity Prices report by the RBA was on October 1, 2020, at 6.30 AM GMT and can be accessed at Invetsing.com. The release of the commodity prices is expected to have a low impact on the AUD.

In September 2020, the YoY the Australian commodity index decreased by 5.8% compared to a 10.2% decline in the YoY index for August 2020.

Let’s see if this release had an impact on the AUD.

GBP/AUD: Before Commodity Price Release on October 1, 2020, 
just before 6.30 AM GMT

The GBP/AUD pair was trading in a neutral pattern before the publication of the Australian commodity index. The 20-period MA was flattened with candles forming just around it.

GBP/AUD: After Commodity Price Release on October 1, 2020, at 6.30 AM GMT

The pair formed a 5-minute bullish candle when the commodity prices were released. Subsequently, the 20-period MA steadily rose with candles forming above it, showing that the AUD weakened against the GBP.

Bottom Line

In Australia, commodity exports account for about 50% of the export income. While this report plays a vital role in forecasting the Australian economy, it is a low-impact economic indicator in the forex market.

Tags Commodities, Commodity Prices, Education, Forex, Forex Drivers, Forex Market, Forex Trading, Fundamental Analysis, Macro Economics, trading, Trading Fundamentals

Crypto Market Analysis

Daily Crypto Review, Nov 26 – Bitcoin’s “Flash Crash” Pulls Price Below $18,000; Blood on the Crypto Streets

Post author By Ilija Rankovic
Post date 26 November, 2020
No Comments on Daily Crypto Review, Nov 26 – Bitcoin’s “Flash Crash” Pulls Price Below $18,000; Blood on the Crypto Streets

The cryptocurrency sector has ended the day in the red as Bitcoin failed to stay above $19,000 and even falling below $18,000 as bears took control of the market. The largest cryptocurrency by market cap is currently trading for $17,000, representing a decrease of 10.67%% on the day. Meanwhile, Ethereum is losing 15.34% on the day, while XRP lost 16.88%.

Daily Crypto Sector Heat Map

Zilliqa 23.75% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Horizen’s gain of 18.71% and Elrond’s 11.54% gain. On the other hand, Verge lost 24.86%, making it the most prominent daily loser. Kusama lost 15.78% while Reserve Rights lost 13.81%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has increased over the day, with its value currently staying at 62.2%. This value represents a 0.6% difference to the upside compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has decreased over the course of the day. Its current value is $560.17 billion, representing an $11.36 billion decrease compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap has created a double top, which triggered a pullback from the recent highs. Not only has the price retraced to the sub-$19,000 level, but it has also broken the $18,500 support level. The price will most likely end up below the $17,850 level, as the market is calling for a pullback for quite some time. However, if the market recovers, we can expect the price to end up between $17,850 and $18,500.

While shorting Bitcoin might be a good profit-making opportunity at the moment, trading against the long-term trend is extremely risky. However, thinking about hedging versus any downturns might be a good option at the moment.

BTC/USD 1-hour Chart

Bitcoin’s 4-hour, daily, and weekly technicals are heavily tilted towards the buy-side and show no signs of neutrality or bearishness. On the other hand, its monthly technicals are showing some signs of neutrality.

BTC/USD 1-day Technicals

Technical factors (1-hour Chart):

Price is far below its 50-period EMA and its 21-period EMA
Price slightly below its lower Bollinger band
RSI is extremely oversold (23.98)
Volume is average (one candle spike)

Key levels to the upside Key levels to the downside

1: $18500 1: $17,850

2: $19000 2: $17,450

3: $19500 3: $17,000

Ethereum

While Ethereum did follow Bitcoin to the downside, both in price direction and severity of the move, the situation doesn’t look that bad. The second-largest cryptocurrency by market cap has started its pullback after failing to stay above $600, culminating in a full-blown dump from $570 to $505. However, the ascending (red) line held up, and ETH reclaimed previous levels and is currently consolidating around $530.

Ethereum’s current outlook is very bullish, but any sharp move to the downside coming from Bitcoin will affect it in a major way. Traders should pay close attention to Bitcoin’s moves if they want to trade Ether.

ETH/USD 1-hour Chart

Ethereum’s technicals are a bit confusing, as its daily and monthly overviews are completely bullish, while its weekly overview shows slight signs of neutrality. Its 4-hour technicals, however, are pointing towards the sell-side.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is below both its 50-period and its 21-period EMA
Price is below its bottom Bollinger band
RSI is extremely oversold (19.47)
Volume is above average

Key levels to the upside Key levels to the downside

1: $600 1: $510

2: $630 2: $500

3: $735 3: $490

Ripple

The fourth-largest cryptocurrency by market cap has performed similarly to the aforementioned two cryptocurrencies. XRP has posted lower highs three times in a row while testing the $0.625 support level each time. However, the last time XRP went towards this level, bears took over and pushed the price further down. XRP bears have seemingly reached exhaustion, and the cryptocurrency is now consolidating around the $0.575 level.

Trading XRP is not advised as trading Bitcoin is (at the moment) both potentially more profitable and more straightforward.

XRP/USD 1-hour Chart

XRP’s technicals on all time-frames are tilted towards the buy-side, with its daily overview being the most bullish time-frame. Its other time-frames show signs of neutrality or even slight bearishness.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is far below both its 50-period EMA and its 21-period EMA
Price is slightly below its bottom Bollinger band
RSI is close to being oversold (31.85)
Volume is above average

Key levels to the upside Key levels to the downside

1: $0.625 1: $0.475

2: $0.79 2: $0.443

3: $0.963 3: $0.4

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Market Analysis

Daily F.X. Analysis, November 26 – Top Trade Setups In Forex – Thanksgiving Day!

Post author By Ali B.
Post date 26 November, 2020
No Comments on Daily F.X. Analysis, November 26 – Top Trade Setups In Forex – Thanksgiving Day!

The economic calendar is a bit muted amid the Thanksgiving holiday. Most Forex brokers remain open for every holiday except Christmas and New Year’s Day. Stock markets and banks have slightly different holiday schedules. In addition to this, the eyes will remain on ECB Monetary Policy Meeting Accounts during the European session. It’s a detailed record of the ECB Governing Board’s most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.19136 after placing a high of 1.18959 and a low of 1.18334. EUR/USD pair extended its upward momentum on Wednesday amid the broad-based U.S. dollar weakness and the rising optimism around the market.

The risk sentiment was triggered by the latest vaccine development that suggested a quick economic recovery and pushed riskier assets like EUR/USD pair on the higher levels. The currency pair EUR/USD rose and placed fresh highs on Wednesday after reaching its highest level since mid-August.

The U.S. dollar was weak on Wednesday after the release of mixed and depressing data from the U.S. The Unemployment claims rose unexpectedly and weighed on the U.S. dollar, and supported the upward momentum in EUR/USD pair.

On the data front, there was no data from the Europe side on Wednesday, while from the U.S., at 18:30 GMT, the Prelim Gross Domestic Product for the third quarter came in line with the anticipations of 33.1%. The Unemployment Claims from last week rose to 778K against the projected 732K and weighed on the U.S. dollar. The Core Durable Goods Orders for October rose to 1.3% against the estimated 0.5% and supported the U.S. dollar. The Durable Goods Orders also rose to 1.3% from the projected 1.0% and helped the U.S. dollar. The Goods Trade Balance from the U.S. for October came in as forecasted -80.3B. The Prelim Wholesale Inventories for October rose to 0.9% against the estimated 0.4% and weighed on the U.S. dollar that added strength to EUR/USD pair.

At 18:36 GMT, the Prelim GDP Price Index for the third quarter also remained as expected at 3.6%. At 20:00 GMT, the Revised UoM Consumer Sentiment for November also came in line with the projections of 76.9. The Core PCE Price Index for October remained flat with the predictions of 0.0%. The New Home Sales for October surged to 999K against the anticipated 972K and supported the U.S. dollar. The Personal Income declined to -0.7% from the projected 0.0% and weighed on the U.S. dollar added in the gains of EUR/USD pair. The Personal Spending raised to 0.5% from the forecasted 0.4% and supported the U.S. dollar. The Revised UoM Inflation Expectations also came in line as expected at 2.8%.

On Wednesday, the European Central Bank released its review on the economy’s financial stability. The central bank warned that European banks would not see profits return to the pre-pandemic level before 2022. According to ECB, the Eurozone leaders have struggled to make sizeable profits over the last decade after the 2008 global financial crisis with more robust regulatory scrutiny and low-interest rates. While the recent coronavirus crisis has worsened bottom lines further, and that will continue to affect the financial sector in the coming months.

In simple words, the banks’ profitability will remain weak, which could hurt their ability to lend money to businesses and individuals that would also reflect the economy’s weak health. These comments from ECB failed to break the upward momentum of the EUR/USD pair on Wednesday.

Daily Technical Levels

Support Resistance

1.1888 1.1936

1.1861 1.1957

1.1841 1.1984

Pivot point: 1.1909

EUR/USD– Trading Tip

The EUR/USD is trading with a bullish bias at the 1.1936 level, holding below an immediate resistance level of 1.1979. On the higher side, the EUR/USD pair may find resistance at 1.1979, and a bullish breakout of 1.199 level can extend the upward trend until 1.1942. On the 2 hour timeframe, the EUR/USD pair has violated the symmetric triangle pattern that was extending resistance at the 1.19052 level, and now this level is working as a support. Let’s consider taking a buying trade over the 1.1905 level, and above this, the next target stays at 1.1997.

GBP/USD – Daily Analysis

The GBP/USD pair closed at 1.33864 after a high of 1.33935 and a low of 1.33037. GBP/USD pair extended its gains for the 4th consecutive session on Wednesday amid the U.S. dollar weakness and the rising global market confidence due to vaccine progress. Meanwhile, the currency pair GBP/USD also remained under pressure on Wednesday after the Brexit uncertainty returned to the market.

The GBP/USD pair has been trading with an upside bias since the start of this week due to rising optimism in the market regarding the latest vaccine developments. Pfizer and BioNtech first reported its vaccine’s efficacy rate, followed by Moderna and AstraZeneca within two weeks. The back to back vaccine progress and the fact that Pfizer and BioNtech have already filed for emergency use authorization of their vaccine and others being in line for it has further supported the market’s risk sentiment.

The risk perceived GBP/USD pair gained traction and saw a jump in demand on expectations that the U.K. and the E.U. were getting closer to reaching a deal on Brexit. However, on Wednesday, the lack of recent progress raised uncertainty in the market and weighed on British Pound.

The French Foreign Minister Jean-Yves Le Drian recently commented that British proposals in the latest negotiations were insufficient. He also accused the U.K. of slowing talks over secondary subjects and playing with the calendar. He urged that securing a deal over fisheries will not be the adjustment variable in the talks.

Meanwhile, a BBC reporter Katya Adler also tweeted that E.U. sources have said that there were doubts about the E.U. Brexit negotiator Michelle Barnier going to London to negotiate once he leaves quarantine on Friday and that the talks were not going well. These updates were also confirmed by the President of the European Commission, Ursula von der Leyen, who said on Wednesday morning that she could not say if there will be a deal and the next few days would be decisive.

All this Brexit news dented the expectations that the two sides will eventually reach a deal on key sticking points. However, market participants decided not to react to such news for Wednesday and continued following the market’s optimism.

On the data front, at 18:30 GMT, the Prelim Gross Domestic Product for the third quarter remained flat with the expectations of 33.1%. The Unemployment Claims from last week surged to 778K against the anticipated 732K and weighed on the U.S. dollar.

The Core Durable Goods Orders for October raised to 1.3% against the forecasted 0.5% and supported the U.S. dollar. The Durable Goods Orders increased to 1.3% from the estimated 1.0% and helped the U.S. dollar. The Goods Trade Balance from the U.S. for October remained flat at -80.3B. The Prelim Wholesale Inventories for October raised to 0.9% against the projected 0.4% and weighed on the U.S. dollar that added strength to GBP/USD pair.

At 18:36 GMT, the Prelim GDP Price Index for the third quarter also came in line with the projections of 3.6%. At 20:00 GMT, the Revised UoM Consumer Sentiment for November also remained flat at 76.9. The Core PCE Price Index for October stayed the same at 0.0%. The New Home Sales for October raised to 999K against the estimated 972K and supported the U.S. dollar. The Personal Income fell to -0.7% from the forecasted 0.0% and weighed on the U.S. dollar added in the GBP/USD pair’s gains. The Personal Spending rose to 0.5% from the projected 0.4% and supported the U.S. dollar. Revised UoM Inflation Expectations also remained flat at 2.8%.

Daily Technical Levels

Support Resistance

1.3325 1.3416

1.3269 1.3451

1.3235 1.3507

Pivot Point: 1.3360

GBP/USD– Trading Tip

The GBP/USD is trading bullish around 1.3396 level, facing resistance at 1.3400 level. The resistance level is extended by the double top pattern at 1.3400 level, and a bullish crossover of 1.3400 level is likely to open further room for buying until 1.3446 level. On the 4 hour timeframe, the GBP/USD pair has formed a bullish channel that supports the pair at the 1.333 area. The RSI and MACD are suggesting a buying trend in sterling. However, I will prefer to open a buying trade over the 1.3396 area today.

USD/JPY – Daily Analysis

The USD/JPY pair closed at 104.456 after a high of 104.596 and a low of 104.253. The USD/JPY pair stayed relatively low, around 104.5 level for the majority of the day, and remained more down during the American trading hours due to mixed macroeconomic data releases from the U.S.

The U.S. Dollar Index (DXY) edged lower in the late American session, remained at the 91.97 level, and kept the U.S. dollar depressed. On the data front, at 18:30 GMT, the Prelim Gross Domestic Product for the third quarter remained flat at 33.1%. The Unemployment Claims from last week rose to 778K against the expected 732K and weighed on the U.S. dollar. The Core Durable Goods Orders for October rose to 1.3% against the expected 0.5% and supported the U.S. dollar. The Durable Goods Orders surged to 1.3% from the anticipated 1.0% and helped the U.S. dollar.

The Goods Trade Balance from the U.S. for October remained flat with the expectations of -80.3B. The Prelim Wholesale Inventories for October rose to 0.9% against the estimated 0.4% and weighed on the U.S. dollar.

At 18:36 GMT, the Prelim GDP Price Index for the third quarter remained flat at 3.6%. At 20:00 GMT, the Revised UoM Consumer Sentiment for November stayed at 76.9. The Core PCE Price Index for October came in line with the expectations of 0.0%. The New Home Sales for October surged to 999K against the projected 972K and supported the U.S. dollar. The Personal Income dropped to -0.7% from the expected 0.0% and weighed on the U.S. dollar. The Personal Spending surged to 0.5% from the forecasted 0.4% and supported the U.S. dollar. The Revised UoM Inflation Expectations also came in line with the anticipations of 2.8%.

The rising unemployment claims and declined personal income weighed on the local currency while the durable goods orders and new home sales, along with the personal spending, supported the U.S. dollar on Wednesday.

Meanwhile, from the Japanese side, the year’s SPPI declined to -0.6% from the forecasted -0.5% and weighed on the Japanese Yen. At 09:59 GMT, the BoJ Core CPI for the year raised to 0.0% from the forecasted -0.1% and supported the Japanese Yen that added weight on the USD/JPY pair on Wednesday.

The currency pair USD/JPY remained bullish throughout the day despite the U.S.’s mixed economic data on the back of rising optimism in the market. The global market sentiment remained confident due to the rising number of vaccine candidates reporting progress. The race to file for emergency use authorization of vaccine started with Pfizer and BioNtech has extended to AstraZeneca and Moderna that has helped raised hopes for a pre-pandemic economic environment and supported the risk sentiment.

The rising risk sentiment added weight on the safe-Haven Japanese Yen and supported the USD/JPY pair’s upward momentum on Wednesday. Another factor involved in the USD/JPY pair’s upward movement was the beginning of the transition of the presidency of President-elect Joe Biden.

Daily Technical Levels

Support Resistance

104.27 104.63

104.09 104.79

103.92 104.98

Pivot point: 104.44

USD/JPY – Trading Tips

The USD/JPY continues to trade in a fresh choppy range of 104.700 – 104.056 level. On the higher side, a bullish breakout of 104.700 resistance can extend the buying trend until the next resistance area of 104.700 and 105.063 level. On the lower side, the support continues to hold around 104.056 and 103.667 level. The MACD suggests an overbought situation of the USD/JPY pair; thus, we should look for selling trade below 104.598 and buying above the same. Good luck!

Tags Daily Brief, EURUSD, Forex, Fundamental Analysis, GBPUSD, Support and Resistance, Technical Analysis, Technical Outlook, Trade Setup, trading, USDJPY

Forex Videos

Forex & The Brexit Conundrum – How You Can Trade the Outcome and Make Insane Profits!

Post author By Keiran
Post date 25 November, 2020
No Comments on Forex & The Brexit Conundrum – How You Can Trade the Outcome and Make Insane Profits!

https://youtu.be/J_zpi8kpyIo

The Brexit Conundrum, how to trade cable?

Thank you for joining this forex academy educational video.

In this session, we will be looking at the Brexit conundrum, where Great Britain, which has left the European Union, will have completed its transition period on the 31st of December, and which this date is enshrined in law, and cannot be moved, unless by an act of legislation, which is completely unlikely, bearing in mind the government’s stance on sticking to this date.

British businesses and Europeans too, are bitterly disappointed that a formal no trade deal has not so far been agreed between the United Kingdom and European Union, where the two sides seem to be at loggerheads over fishing rights, and the so-called level playing field where the European Union is worried that the United Kingdom might undercut European businesses when the UK forms trade deals with other countries around the world, once the transition period ends.

This affects UK businesses who simply do not know whether they will be levying tariffs against the EU should a free trade deal not be set in place, and whereby they are simply not in a position to know which types of rules and regulations they will be following on the 1st of January 2021.

Rumors and speculation are driving the financial markets, where one moment the two sides are close to implementing a free trade deal, only to be scuppered by officials on either side saying they are still miles apart, but where while there is hope that an 11th-hour free trade deal can be completed. Traders are looking on the positive side, and this is reflected in the British pound, here seen on a one-hour chart of the GBPUSD pair where it is most widely traded.

The swing in price action between positions A B and C is over 400 pips during the 10 days of trading here. These are significant moves. But interestingly, we can see that price is largely conforming to within two key levels, 1.31 and 1.33, with a slight bias to the upside. A and C is a classic double top reversal formation.

Here we have highlighted the pullback from position C to position D, which has respected the 1.3200 line after the pullback. It is a 50% retracement of the earlier move from A to B, and this is significant because traders believe there will be a last-minute attempt to close a free trade deal between the two sides, who are playing this situation like a game of poker, and where neither side wants to be the first one to blink.

So where next for the pound? Certainly, if a free trade deal is agreed on, the pound should strengthen against the dollar. Some analysts predict moves of to 1.400, should a free trade deal be agreed on. But price action could revert lower to potentially to 1.2500 should the UK leave on WTO rules.

Any trading on the pound should be done with the utmost caution and with tight stops in place. Look out for moves in price action to these key trade levels, which are round numbers, and use them in your trading setup. Expect volatile price action the longer this is drawn out, bearing in mind two deadlines have already been passed, one being the 15th of October as set down by the British government’s and more recently the middle of November, which were deemed necessary to implement new legislation pertaining to a possible free trade deal. And wherever possible, instigate break-even stop-outs on your trades.

Tags Brexit, Education, Forex Trading, Fundamental Analysis, trading, undelying themes, underlying news

Forex Daily Topic Forex Fundamental Analysis

Everything You Need To Know About The ‘Jobs to Applications Ratio’

Post author By Reddy Shyam Shankar
Post date 25 November, 2020
No Comments on Everything You Need To Know About The ‘Jobs to Applications Ratio’

Introduction

For any economy, one of the best indicators of health in the labor market is how quickly the unemployed get absorbed into the job industry. This would indicate if the current economy is expanding at par with the growing number of job seekers. Apart from showing the absorption rate in the job market, it can also be used as a coincident economic indicator.

Understanding Jobs to Applications Ratio

The jobs to applications ratio help to put into perspective the number of job vacancies available vs. the number of job applications made during a particular time.

The job vacancies, in this case, represents the totality of the existing Job Vacancies from the previous reporting period that haven’t been filled and the new vacancies in the current period. For example, the total job vacancies for October 2020 would include the unfilled vacancies from the previous months in 2020 and the vacancies that became available in October 2020. The number of job applications does not necessarily need to be those that directly applied for these vacancies. This number is the totality of job seekers who have registered with employment bureaus across the country seeking employment.

Therefore, the formula of the jobs to applications ratio is

When the number of active job openings is higher than that of active job seekers, the jobs to applications ratio will be higher than 1. Furthermore, the jobs to applications ratio will increase if the number of job openings increases faster than that of active job seekers. Conversely, if the number of active job seekers is higher than that of active openings, the jobs to applications ratio will be lower. Similarly, when the number of active job seekers grows at a faster pace than that of active job openings, the jobs to applications ratio will decrease at a rapid rate.

In most countries, the number of graduates from tertiary academic institutions is usually high. For this reason, most jobs to applications ratio reports usually exclude new school graduates and part-time job seekers. The primary reason for doing this is to smoothen the data since it is not expected that the labor market will absorb all graduates.

Using Jobs to Applications Ratio in Analysis

The Jobs to Applications Ratio shows the health of the labor market and is also a coincident indicator of economic growth. The best way to use the jobs to applications ratio in the analysis is by viewing it as a time series. It will enable you to compare the change in the economy over time easily.

To understand the implication of the Jobs to Application Ratio, we must first understand how job openings and unemployment come about. When the economy is expanding, the unemployment levels go down. An expanding economy is mainly driven by an increase in demand in the economy. Usually, household demand is the primary driver of the increase in aggregate demand.

When the aggregate demand rises, producers of goods and services must also scale up their operations to take advantage of the increasing demand and to avoid distortion of equilibrium price. When they expand their operations, they will need to hire more workers; this is where the unemployment levels go down. Also, note that when the unemployment rate reduces, it means that households’ expenditure increases, which also leads to the expansion of the economy. It is a feedback loop.

It also means that when the economy is contracting, it is a sign of a decrease in aggregate demand. This decrease force producers of consumer goods and services to cut back their production, which results in fewer job openings and increased unemployment.

Now let’s see what jobs to application ratio has to do with all this. When the Jobs to Applications Ratio is increasing over time, it implies that the number of active job openings is growing faster than that of the active job seekers. If, for example, the jobs to applications ratio has been increasing steadily over the past couple of months or years, it would mean the economy has been expanding. This increase shows that increasingly more jobs have been created in the economy.

Alternatively, it could mean that the rate of job retention in the economy is higher since fewer people lose their jobs and begin seeking employment all over again. Conversely, when the Jobs to Applications Ratio is continually decreasing, it means that the economy is contracting and the economy is creating fewer jobs. It could also mean that more jobs are lost in the economy hence the higher number of new job seekers.

The Jobs to Applications Ratio can also show the business cycles and periods of recession and expansion in the economy. When the Jobs to Applications Ratio continually drops, it implies that the economy has been contracting over an extended period with a growing number of unemployed in the economy. This is a clear sign of economic recession. In Japan, for example, the persistent drop in the job to application ratio coincided with the coronavirus-induced recession of the first half of 2020.

Source: Japan Institute for Labour Policy and Training

In times of economic recovery, businesses are presumed to gradually increase their operations, which means that the jobs to applications ratio will steadily increase.

Impact of Jobs to Applications Ratio on Currency

The value of the currency fluctuates depending on the perceived economic growth. Thus, the direct impact that jobs to applications ration has on currency is its inherent ability to show economic expansions and contractions.

The domestic currency will be expected to appreciate when the jobs to applications ratio increases. The increase in the jobs to applications ratio shows that the economy has been growing hence improved living standards.

Conversely, the domestic currency will depreciate when the jobs to application ratio are steadily decreasing. The continual decrease shows that the domestic economy has been contracting.

Sources of Data

In Japan, the Japan Institute for Labour Policy and Training is responsible for conducting surveys of the Japanese labor market. The institute publishes the data on Jobs to Applications Ratio monthly.

Trading Economics has a historical review of the Japanese jobs to applications ratio.

How Jobs to Applications Ratio Release Affects The Forex Price Charts

The Japan Institute for Labour Policy and Training published the latest jobs to applications ratio on October 2, 2020, at 8.30 AM JST. The release is accessed from Investing.com. Moderate volatility is expected on the JPY when the data is published.

In August 2020, the jobs/applications ratio was 1.04 compared to the 1.08 recorded in July 2020. Furthermore, the August ratio was less than the analysts’ expectations of 1.05.

Let’s see how this release impacted the JPY.

USD/JPY: Before Jobs to Applications Ratio Release on October 2, 2020, 
just before 8.30 AM JST

Before the release of the ratio, the USD/JPY pair was trading in a subdued uptrend. The 20-period MA was only slightly rising.

USD/JPY: After Jobs to Applications Ratio Release on October 2, 2020, 
at 8.30 AM JST

The pair formed a 5-minute bearish “hammer” candle immediately after the release of the ratio. Subsequently, it traded in a neutral pattern before adopting a bullish trend.

Bottom Line

The Jobs to Applications Ratio plays a significant role in establishing the health of the labor market. However, in the forex market, the unemployment rate is the most-watched economic indicator when it comes to the health of the labor market.

Tags Economic Indicators, Education, Employment Rate, Forex, Forex Drivers, Forex Trading, Fundamental Analysis, Jobs to Applications Ratio, Macro Economics, trading

Crypto Market Analysis

Daily Crypto Review, Nov 25 – Bitcoin Above $19,000: What’s Next?

Post author By Ilija Rankovic
Post date 25 November, 2020
No Comments on Daily Crypto Review, Nov 25 – Bitcoin Above $19,000: What’s Next?

The cryptocurrency sector has spent the day pushing towards the upside as Bitcoin rallied and reached past $19,000. The largest cryptocurrency by market cap is currently trading for $19,093, representing an increase of 4.37% on the day. Meanwhile, Ethereum lost 0.55% on the day, while XRP gained 14.94%.

Daily Crypto Sector Heat Map

Verge 63.06% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Stellar’s gain of 59.30% and Status’s 31.14% gain. On the other hand, Bitcoin Gold lost 16.21%, making it the most prominent daily loser. SushiSwap lost 12.05% while Balancer lost 7.89%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has increased over the course of the day, with its value is currently staying at 61.06%. This value represents a 1% difference to the upside compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased slightly over the course of the day. Its current value is $571.53 billion, representing an $8.86 billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap has had an exciting day as its price reached past the $18,500 mark and pushed towards its all-time highs. Bitcoin managed to get to $19,450 before the momentum started dying off. It is currently consolidating just at the $19,000 mark, fighting to stay above it. This move was enabled by a booming altcoin situation, which led to a money pour-over into Bitcoin.

Any trading to the downside is completely irresponsible now due to how Bitcoin is moving. On the other hand, its movement towards the upside is very hectic, and traders should pay attention to when they enter and exit trades. If Bitcoin establishes its presence above the $19,000 mark with confidence, another push that might break the $20,000 all-time high level is entirely possible.

BTC/USD 2-hour Chart

Bitcoin’s technicals are tilted to the bull-side slightly, with only the weekly time-frame being completely bullish. In contrast, its other time-frames contain a hint of neutrality or even bearishness.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):

Price is above its 50-period EMA and at its 21-period EMA
Price slightly above its middle Bollinger band
RSI is neutral (55.57)
Volume is average

Key levels to the upside Key levels to the downside

1: $19000 1: $18500

2: $19500 2: $17,850

3: $19,666 3: $17,450

Ethereum

Ethereum’s parabolic move, which brought its price from $480 to $625, has seemingly ended, and Ethereum has entered a consolidation/retracement phase. While it was uncertain whether the second-largest cryptocurrency by market cap will stay above $600, the fight for the level has ended, and ETH moved back below it.

Ethereum has a very strong zone of resistance above $600 and all the way up to $632. On the other hand, it has a decently strong support zone at $575-$580. We can expect Ethereum to move in that range in the short-term unless a new breakout occurs.

ETH/USD 2-hour Chart

Ethereum’s technicals are tilted to the bull-side slightly, with only the monthly time-frame being completely bullish. In contrast, its other time-frames contain slight neutrality or even bearishness.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is above its 50-period and slightly below its 21-period EMA
Price is near its bottom Bollinger band
RSI is neutral (50.82)
Volume is above average

Key levels to the upside Key levels to the downside

1: $600 1: $510

2: $630 2: $500

3: $735 3: $490

Ripple

The fourth-largest cryptocurrency by market cap’s controversial parabolic rise has died down and actually kept most of its gains. XRP has moved back from its recent highs of $0.78 (and even $0.9 on some exchanges) to a steadier $0.68, which is its current price. We can also see that XRP made a double top at the $0.735 mark, as well as a double bottom at the $0.625 support level.

Trading XRP is more manageable now as the volatility has died down, and the zones of support/resistance have been established. However, trading crypto overall is extremely risky at the moment, and only moves to the upside (and possibly sideways movement) should be traded.

XRP/USD 2-hour Chart

XRP’s 4-hour and daily overviews are completely bullish and show no signs of neutrality whatsoever, while its weekly and monthly overviews show slight neutrality or even a hint of bearishness.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is far above its 50-period EMA and slightly above its 21-period EMA
Price is slightly above its middle Bollinger band
RSI is neutral (59.98)
Volume is above average

Key levels to the upside Key levels to the downside

1: $0.79 1: $0.625

2: $0.963 2: $0.475

3: $1.01 3: $0.443

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Market Analysis

Daily F.X. Analysis, November 25 – Top Trade Setups In Forex – Unemployment Claims Eyed!

Post author By Ali B.
Post date 25 November, 2020
No Comments on Daily F.X. Analysis, November 25 – Top Trade Setups In Forex – Unemployment Claims Eyed!

The economic calendar is filled with medium impact economic events such as Unemployment Claims, UoM Consumer Sentiment, and Prelim GDP q/q from the United States on the news front. The market may show some price action during the U.S. session on the release of U.S. Jobless Claims.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18897 after placing a high of 1.18959 and a low of 1.18334. After placing losses for two consecutive days, the EUR/USD pair rose and started to post gains on Tuesday amid the rising optimism and risk sentiment surrounding the market.

The safe-haven appeal suffered after AstraZeneca’s latest news that its vaccine could reach a 90% efficacy rate on the second dosage from 70% in the first one. However, the EUR/USD pair traders remained confused on Tuesday and moved the currency pair between gains and losses throughout the day and ended the day with gains as optimism regarding vaccine overshadowed the U.S. dollar’s strength. The U.S. dollar was strong in the market ahead of Wall Street’s opening; however, it fell under selling pressure after the U.S. Consumer Confidence fell in November.

On the data front, at 12:00 GMT, the German Final GDP for the third quarter raised to 8.5% against the forecasted 8.2% and supported the single currency Euro that added further gains in EUR/USD pair. AT 14:00 GMT, the German IFO Business Climate for November also raised to 90.7 against the expected 90.3 and supported EUR/USD pair. At 19:00 GMT, the Housing Price Index for September elevated to 1.7% against the projected 0.8% and supported the U.S. dollar from the U.S. side.

The S&P/CS Composite -20 HPI for the year also surged to 6.6% against the expected 5.3% and supported the U.S. dollar that ultimately capped further gains in EUR/USD pair. At 19:59 GMT, the Richmond Manufacturing Index dropped to 15 points from the projected 20 and weighed on the U.S. dollar that added gains in EUR/USD pair. The most awaited C.B. Consumer Confidence from the U.S. was released at 20:00 GMT also fell to 96.1 against the anticipated 97.7 and weighed on the U.S. dollar that added further gains in EUR/USD pair on Tuesday.

Meanwhile, the reports that the U.S. President Trump has agreed with the transition process with Joe Biden and that the White House has given the go-ahead to Biden raised the risk sentiment and added further gains EUR/USD pair. Furthermore, the vaccine hopes also kept the market sentiment improved with the news that the new vaccine developed by AstraZeneca, a British Pharmaceutical, can provide 90% protection against the coronavirus and be cheaper against the previous Pfizer and Moderna due to its comfortable storage facility. These reports raised hopes that the global economy will start recovering now, and the riskier asset EUR/USD pair gained traction and started posting gains.

Daily Technical Levels

Support Resistance

1.1851 1.1911

1.1814 1.1934

1.1791 1.1972

Pivot point: 1.1874

EUR/USD– Trading Tip

The EUR/USD is trading with a bullish bias at the 1.1895 level, holding below an immediate resistance level of 1.1912. On the higher side, the EUR/USD pair may find resistance at 1.1912, and a bullish breakout of 1.1912 level can extend the upward trend until 1.1942. On the 2 hour timeframe, the EUR/USD pair was supported by an upward trendline, which got violated, and now the same trendline is supporting EUR/USD pair at 1.1862. Let’s look for a selling trade below the 1.1866 level today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.33615 after a high of 1.33802 and a low of 1.32929. The currency pair GBP/USD continued its bullish movement on Tuesday for the 3rd consecutive day. The GBP/USD pair continued getting support from the British Pound’s strength after the rising Brexit optimism in the market. The hopes that a Brexit deal will be reached soon between the U.K. and the E.U. kept underpinning the Sterling and forced GBP/USD pair to remain on the market’s positive side.

Although nothing has been confirmed about the Brexit deal, the talks between both nations have been extended into this week. On Tuesday, a member of the Bank of England’s monetary policy committee said Tuesday that vaccine news had provided some light at the end of the tunnel.

He also said that he saw a long-term scarring effect from the coronavirus outbreak. He added that it was too early to say that vaccine news will significantly improve the Bank’s economic outlook for 2021. He said that even if the economy came back because of the vaccine, it would have to face the economy-Brexit’s further long-term problem.

On the data front, at 16:00 GMT, the CBI Realized Sales for November came in as -25 against the forecasted -34 and supported British Pound and added in the gains of the GBP/USD pair. At 19:00 GMT, the Housing Price Index for September rose to 1.7% against the expected 0.8% and supported the U.S. dollar from the U.S. side. The S&P/CS Composite -20 HPI for the year also raised to 6.6% against the estimated 5.3% and helped the U.S. dollar that ultimately capped further gains in GBP/USD pair. At 19:59 GMT, the Richmond Manufacturing Index fell to 15 points from the anticipated 20 and weighed on the U.S. dollar that added gains in GBP/USD pair. The most awaited C.B. Consumer Confidence from the U.S. was released at 20:00 GMT, also fell to 96.1 against the projected 97.7 and weighed on the U.S. dollar that added further gains in GBP/USD pair on Tuesday.

Furthermore, the GBP/USD pair was also supported by the latest optimism in the market that had kept the risk-on market sentiment improved. The risk perceived British Pound was supported by the risk sentiment raised by the AstraZeneca vaccine news. Its vaccine was proven to be 90% effective in the second dosage. It was said to be cheaper as it can be stored in an ordinary refrigerator compared to Pfizer, and Moderna’s vaccines that provide 95% protection against the virus were not so easy to store. This optimism also kept the market’s risk sentiment on the upper side and continued supporting the GBP/USD pair on Tuesday.

Daily Technical Levels

Support Resistance

1.3289 1.3312

1.3274 1.3320

1.3266 1.3336

Pivot point: 1.3297

GBP/USD– Trading Tip

The GBP/USD traded bearishly at 1.3340, having bounced off over the support area of the 1.3292 level. On the higher side, the pair may go after the resistance level of 1.3394. Over there’s an upward trendline that is supporting Sterling on the 2-hour timeframe. The Cable below the 1.3292 level may find support at the 1.3240 level while the RSI and MACD support buying. Thus we should consider taking buying trade over the 1.3292 level to target 1.3394.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.439 after placing a high of 104.759 and a low of 104.144. The pair USD/JPY seesawed on Tuesday as it moved in an upward direction in early trading hours and reached near 104.76 level while in the late trading session, the USD/JPY pair started to lose its earlier gains and continued its bearish bias. The selling bias in the currency pair USD/JPY raised on Tuesday after posting massive gains on Monday amid the mixed market sentiment. The safe-haven Japanese Yen was under pressure on Tuesday after the positive market mood circulated due to progress in AstraZeneca’s coronavirus vaccine.

The equity market rallied after the latest optimism regarding the 90% adequate protection against the coronavirus with a comfortable storage facility compared to Pfizer’s and Moderna vaccine’s 95% protection against the virus with a difficult storage facility. The market participants continued following the optimism and shifted towards riskier assets against the safer ones.

The equity market was also boosted on Tuesday, with Dow Jones moving up at 30,000 points and the three main indexes in Wall Street rising by 1.5% each. The risk rally in Wall Street added pressure on the safe-haven Japanese Yen and supported the USD/JPY pair’s upward momentum on Tuesday. The USD/JPY pair could not remain on the upper side for long and started to lose its earlier gains after releasing the U.S. Macroeconomic data. At 19:00 GMT, the Housing Price Index for September from the U.S. rose to 1.7% against the anticipated 0.8% and supported the U.S. dollar. The S&P/CS Composite -20 HPI for the year also raised to 6.6% against the estimated 5.3% and helped the U.S. dollar. At 19:59 GMT, the Richmond Manufacturing Index was dropped to 15 points from the forecasted 20 and weighed on the U.S. dollar that added pressure on the USD/JPY pair. The most awaited C.B. Consumer Confidence from the U.S. was also released at 20:00 GMT that fell to 96.1 against the estimated 97.7 and weighed on the U.S. dollar that ultimately added in the losses of the USD/JPY pair on Tuesday.

The decline in Consumer Confidence in November weighed on the local currency U.S. dollar as the rising number of coronavirus cases in the U.S. was raising questions over the economic recovery in the absence of further stimulus aid. The talks were set to resume between Republicans and Democrats to discuss the possibility of delivering an additional aid package in December.

Furthermore, the latest news from the White House that the U.S. President-elect Joe Biden was formally given the go-ahead by the federal agency to begin his transition to the presidency also capped further losses in the USD/JPY pair on Tuesday. The U.S. General Services Administration (GSA), an independent agency, determined that Biden was the outward winner of the election and informed Biden that his transition until January 20 could officially begin. The go-ahead was given by the White House to Biden to intensify the fight against the coronavirus. All these positive news kept the risk-on market sentiment supported and continued supporting the USD/JPY pair.

Daily Technical Levels

Support Resistance

103.76 103.87

103.69 103.93

103.64 103.99

Pivot point: 103.81

USD/JPY – Trading Tips

Tags Daily Brief, EURUSD, Forex Trading, Fundamental Analysis, GBPUSD, Support and Resistance, Technical Analysis, Technical Outlook, trading, USDJPY

Forex Videos

Is War Developing Between China, Taiwan & The USA! How To Trade In Times Of War!

Post author By Keiran
Post date 24 November, 2020
No Comments on Is War Developing Between China, Taiwan & The USA! How To Trade In Times Of War!

https://youtu.be/XuDE2jKMbZc

Is a war developing between China, Taiwan, and the USA?

Thank you for joining this Forex academy educational video.

Is a war developing between China, Taiwan, and the USA?

Taiwan was a Dutch colony between 1624 and 1661, having been administered by China’s Qing dynasty from 1683 to 1895. But today, China regards Taiwan as a breakaway province and says it is determined to retake it. However, Taiwan’s leaders argue that it is a sovereign state, with its constitution, democratically-elected leaders, and about 300,000 active troops in its armed forces.

China has been piling the pressure on Taiwan’s President, Tsai Ing-wen, to acknowledge the “One-China” policy since before she took over the role in 2016.

And with the 2019-20 crisis in Hong Kong, as a result of the China / Hong Kong National Security Law, some protesters, fearing extradition to mainland China, and facing criminal charges, have been escaping to Taiwan, many with their passports confiscated, elect to take the perilous 370-mile sea voyage to Taiwan which has promised assistance to the people of Hong Kong, thus antagonising China.

After decades of hostility between China and Taiwan, things started improving in the 1980s, and China took advantage by putting forward a formula, known as “one country, two systems” – such as implemented in Hong Kong – and under which Taiwan would be given significant autonomy if it accepted Chinese reunification.

Also, throughout 2018, China put pressure on international companies by forcing them to list Taiwan as a part of China on their websites. Those who declined were threatened to be banned from doing business in China.

In the meantime, the US has been supporting Taiwan, much to the annoyance of the Chinese Communist Party, with Washington sending its highest-ranking politician to hold meetings on the island because what it said was an “increasing threat posed by Beijing to peace and stability in the region.” The US approved an $8 billion sale of F-16 fighter jets to Taiwan last year, taking its fleet to over 200, also angering the Chinese government.

In a more recent development, Chinese fighter jets have been entering Taiwan’s airspace. SU-30 fighters and Y-8 transport planes have been spotted over Taiwan during September 2020, fuelling tensions in the region.

Japan, worried about the number of US and Chinese military exercises in the region over the South China sea, see the possibility of an escalated conflict perhaps as the result of an accident.

Should such a conflict between China and America occur, what might we expect from the financial markets? Mayhem, confusion, and extreme market volatility, stock indices around the globe would fall, but especially within the United States, and we might see the Japanese yen and Swiss franc being bought as safe-haven assets.

China seems determined to retake Taiwan, as much as Taiwan appears to want to break away officially. The Chinese government would very likely not back down, and I’ll poke a finger in the west by provoking them into military exercises while flying over Taiwan’s airspace, which China sees as its own.

This is a crisis that he’s not going to go away anytime soon. It will undoubtedly escalate. Traders are advised to keep an eye on the escalating conflict because it will likely lead to spikes in many asset classes.

Tags Education, Forex, forex news, Fundamental Analysis, news, underlying themes, War

Forex Fundamental Analysis

USD/CAD Global Macro Analysis – Part 3

Post author By Reddy Shyam Shankar
Post date 24 November, 2020
No Comments on USD/CAD Global Macro Analysis – Part 3

Introduction

The exogenous analysis for the USD/CAD pair will involve analyzing factors that significantly contribute to these two currencies’ interaction. Remember, when trading forex, you are trading a currency pair, which means you buy one currency and sell the other. With exogenous analysis, you get the bigger picture regarding the currency pair as a whole. In a sense, the exogenous analysis compares how the endogenous factors between the US and Canadian economies net against each other.

For the exogenous analysis, we’ll focus on:

Interest rate differential
GDP growth rates
Differences in the trade balance

US and Canadian Interest rate differential

Interest rate differential is the difference between the interest rates in the US and Canadian. When the interest rate in one country s higher than the other, investors will pull their funds from the country with the lower interest rate to invest in high yielding securities in the country with the higher interest rate.

Canada’s interest rate has for most of the year been higher than that in the US. We, therefore, expect that from March 2020, the USD weakened against the CAD. However, since the current interest rate differential is 0%, going forward, we do not expect that it will play a significant role in determining the value of the USD/CAD pair. Hence, we assign it a neutral score of 0.

GDP Growth Differential

A country’s GDP growth is mainly propelled by growth in international trade. Therefore, when the GDP expands, we can expect that the country is becoming a net exporter. That means the demand for its currency increases in the international market, which also increases its value.

Over the years, the Canadian GDP growth rate has outpaced that of the US. However, in the third quarter of 2020, the US GDP growth rate outpaced Canada by 23.1%. Based on our correlation analysis between the GDP differential and the USD/CAD pair, we assign an inflationary score of 2. If this trend continues, we expect a future strengthening of the USD against CAD.

Differences in Trade Balance

The balance of trade helps to show the trade deficits that a country operates in the international market. The trade deficit widens as the country consistently becomes a net importer. Furthermore, the trade deficit can also widen if the value of the goods exported by a country drops while the value of imports increases.

From April 2020, the Canadian trade deficit has been widening as compared to that of the US. In October 2020 data release, the Canadian trade deficit widened by CAD 3.25 billion while the US trade deficit widened by $3.1 billion. Due to its high correlation with the USD/CAD pair, we assign the difference in trade deficit an inflationary score of 3. If this trend persists, we expect it to result in bullish USD/CAD.

Conclusion

Based on the exogenous analysis, the USD/CAD gets an inflationary score of 5. It implies that if the current trend of the exogenous factors persists, we can expect a bullish trend for the USD/CAD pair in the near term. Now that we know the trend, we can use technical analysis to find accurate entries and exits in this currency pair while keeping the bullish trend in mind.

From the exogenous analysis of the USD/CAD pair, we have observed that the pair is expected to adopt a bullish trend in the near term. Let’s see if this is supported by technical analysis. In the below weekly chart, we can see the pair bouncing off a 2-year support line and from the oversold territory of the Bollinger Bands. This indicates a clear bullish trend in the near future.

We hope you found this analysis informative. Please let us know if you have any questions in the comments below, and we would love to address them. Cheers.

Tags CAD, Education, Exogenous Analysis, Forex, Fundamental Analysis, Global Macro Analysis, trading, USD, USD/CAD

Forex Fundamental Analysis

USD/CAD Global Macro Analysis – Part 2

Post author By Reddy Shyam Shankar
Post date 24 November, 2020
No Comments on USD/CAD Global Macro Analysis – Part 2

CAD Endogenous Analysis – Summary

The Canadian endogenous factors recorded a score of -11.5, implying a deflationary effect in the CAD as well. This means that according to the Fundamental indicators, the CAD has also lost its value since the year began, but not as much as the USD.

Unemployment Rate

The unemployment rate measures the number of people who do not have jobs and are actively seeking gainful employment. The unemployment rate is used to show business cycles and economic growth because when businesses expand, the demand for labor is higher when the economy is undergoing a contraction, the demand for labor decreases, and the unemployment rate increases.

In October 2020, the Canadian unemployment rate was 8.9% down from the historic highs of 13.7% registered in May 2020. The rate is still higher than the 5.6% average before the onset of the coronavirus pandemic.

Based on our correlation analyses, the Canadian unemployment rate gets a score of -6. It means that in 2020 the unemployment rate has a deflationary impact on the CAD.

Canadian Rate of Inflation

The Canadian CPI is a weighted average of the following categories: Shelter 27.5%, Transportation 9.3%, Food 16.1%, household operations 11.8%, education and recreation 11.8%, clothing 5.7%, health and personal care 5%, and alcohol and tobacco 3%.

The CPI target in Canada is 2%. The Bank of Canada uses monetary policy to maintain inflation within the target range of 2%. An increasing rate of inflation is positive for the CAD.

In October 2020, the annual inflation rate in Canada rose to 0.7 from lows of -0.4 in May 2020, but still below the 2.4 recorded in January.

We assign the Canadian rate of inflation a score of -7, meaning it had a negative impact on the CAD.

Canada Industrial production

Industrial production is used to measure the output from manufacturing, mining, and the utility sectors in Canada.

In August 2020, the industrial production in Canada declined by 9.04%. Based on our correlation analysis of the Canadian industrial production and GDP, we assign it a deflationary score of -5.

Manufacturing sales

The Canadian manufacturing sales measure the value changes in the output from the manufacturing goods in the economy. It can be used to measure the short-term health of the manufacturing sector and, by extension, the health of the overall economy.

In September 2020, the manufacturing sales were worth CAD 53.8 billion, representing a 1.4% increase from August. However, manufacturing sales are still 3.6% below the pre-coronavirus period.

Based on the correlation analysis with the Canadian GDP, we assign an inflationary score of 3 to the manufacturing sales.

Retail sales

The Canadian retail sales data measures the total value that households spend on purchasing goods and services for direct consumption. This value is adjusted for inflation.

Consumption by households accounts for up to 78% of the Canadian GDP. Changes in the retail sales data can be used as a leading indicator of the welfare of households. Higher retail sales imply increased demand in the economy hence higher manufacturing and lower unemployment rates.

The retail sales in September 2020 steadily increased by 1.1% from lows of -26.4% in April. Based on the correlation analysis with the GDP, we assign retail sales a score of 6.

Government debt to GDP ratio

In 2019, Canada’s public debt to GDP was 88.6, representing a 1.26% decline from 89.7 registered in 2018.

In 2020 the government debt to GDP in Canada is expected to rise due to the various stimulus packages necessitated by the coronavirus pandemic. However, based on the past correlation analysis with GDP, we assign a marginal deflationary score of -2 on Canada’s government debt to GDP ratio.

Canada housing starts

The housing starts indicators track the number of new residential buildings that begin construction. It is used as a leading indicator of the demand in the real estate market and demand in the housing market.

In October 2020, the housing starts in Canada were 214,875 units. Based on the correlation analysis with the GDP, we assign Canadian housing starts an inflationary score of 2.5.

Canada Government Budget Value

This indicator measures the value of the Canadian budget in terms of surplus or deficit. It takes into account the difference between revenues collected and the expenditures by the government. The government budget value doesn’t include public debt.

As of August 2020, the Canadian budget deficit was CAD 21.94 billion. Revenue collected by the government during the month dropped by CAD 1.3 billion, while expenditures increased by CAD 42.92 billion due to COVID-19 response measures.

Based on its high correlation with the GDP, we assign a deflationary score of -6.

Business confidence

In Canada, business confidence is measured by the Ivey Purchasing Managers’ Index (PMI). It measures the business expectations and operating environment from the perspective of an operating panel of purchasing managers from both private and public sectors across Canada.

The Ivey PMI focuses on supplier deliveries, purchases, employment, inventories, and prices. Values over 50 imply expansion while below 50 implies contraction.

The Ivey PMI reading for October 2020 was 54.5, indicating expansion. From our correlation analysis, we assign Canadian business confidence an inflationary score of 3.

In our next article, we will analyze the Exogenous factors of both USD and CAD to come to an appropriate conclusion.

Tags CAD, CAD Endogenous Analysis, Education, Forex, Fundamental Analysis, Global Macro Analysis, trading, USD, USD/CAD

Forex Signals

GBP/USD Bounces off Upward Trendline Support – Quick Update on Signal

Post author By Ali B.
Post date 24 November, 2020
No Comments on GBP/USD Bounces off Upward Trendline Support – Quick Update on Signal

The GBP/USD pair closed at 1.33222 after a high of 1.33975 and a low of 1.32636. The British Pound raised to its 10-weeks high level and then gave up some gains against the U.S. dollar in late trading sessions on the back of U.S. dollar strength. The rise in GBP/USD pair came in after the rising optimism over a Brexit deal after the European Commission reportedly told E.U. ambassadors that 95% of a post-Brexit deal had been agreed.

Daily Technical Levels

Support Resistance

1.3289 1.3312

1.3274 1.3320

1.3266 1.3336

Pivot point: 1.3297

The GBP/USD traded bearishly at 1.3290, but it now seems to bounce off over the support area of the 1.3292 level. On the higher side, the pair may go after the resistance level of 1.3394. Over there’s an upward trendline that is supporting Sterling on the 2-hour timeframe. Below the 1.3292 level, the Cable may find support at the 1.3240 level while the RSI and MACD are in support of buying. Thus we should consider taking buying trade over the 1.3292 level to target 1.3394.

Entry Price – Buy 1.33583

Stop Loss – 1.33631

Take Profit – 1.33983

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

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Tags Forex, Fundamental Analysis, GBP-USD, Support and Resistance, Technical Analysis

Forex Fundamental Analysis

Exploring The ‘US Baker Hughes Oil Rig Count’ Macro Economic Indicator

Post author By Reddy Shyam Shankar
Post date 24 November, 2020
No Comments on Exploring The ‘US Baker Hughes Oil Rig Count’ Macro Economic Indicator

Introduction

Countries like the US and Canada, whose economies largely depend on oil, knowing if oil production is increasing or decreasing can offer valuable insight into the economy. The changes in production not only serve as a leading indicator of demand for oil and its products but also of the labor market.

Understanding US Baker Hughes Oil Rig Count

Baker Hughes is an American energy technology company providing oil field services. The company specializes in the oil and gas industry, providing services from exploration, formation evaluation, oil drilling, production, and reservoir consulting. Baker Hughes is operational in over 120 countries. Other services provided by the company include turbomachinery and process solutions, software and analytics, and measurements, testing, and control, throughout the oil and gas industry.

The US Baker Hughes Oil Rig Count reports the number of oil and gas rigs operating in the US. The report is published every Friday at noon EST. The report details the rig count based on location, i.e., the number of rigs operational on land, inland waters, and offshore. It also contains a section on “US Breakout Information,” which has subsections on oil, gas, and miscellaneous.

This section of the report also shows the number of directional, horizontal, or vertical rigs. Furthermore, the report also shows the ‘Major State Variances.’ A different section of the US Baker Hughes Oil Rig Count report also breaks down the Rotary oil and gas rigs operations by State and location.

Suffice to say, the US Baker Hughes Oil Rig Count report provides a comprehensive look into the oil and gas weekly operations. The report shows the rigs that are operational during the current reporting period and the change from the previous reported period. It also shows the current change from a year ago.

Using US Baker Hughes Oil Rig Count in Analysis

The US Baker Hughes Oil Rig Count can show the demand for oil and oil products. Furthermore, the report is a leading indicator of the demand for products and services offered by the oil service industry.

When the oil rig count increases, more oil rigs have become operational during the reporting period. In the labor industry, this increase has two implications – an increase in direct and indirect labor. Direct labor increases since the workers in these rigs become active. Indirect labor is in the form of workers who will provide ancillary services to the operational oil rigs. In cities where these rigs are operational, they form an integral part of the economy. Therefore, when they are operational, the economies in these regions flourish, and the unemployment levels decline.

Furthermore, the consumer discretionary sectors also expand due to an increase in household demand. Conversely, when the count reduces, it means that the oil rigs are shutting down. The consequence of this is layoffs, which eventually depresses the demand in the economy. It is essential to know that while oil production in the US is not the major employer in the labor market, the effects of massive job losses on the broader economy cannot be ignored.

The increase in the US Baker Hughes Oil Rig Count means that there is an increasing oil demand. To better understand the oil demand, we first need to understand the top consumers of oil in the economy. According to the US Energy Information Administration, the top consumers of oil in the US are; transportation 68%, industries 26%, residential 3%, commercial 2%, and electric power less than 1%. Therefore, we can safely conclude that whenever oil production increases, the increase in demand is primarily driven by transportation and industrial sectors.

Here is the implication to the economy, when oil demand by these two industries increases, demand for goods and services offered by these two sectors has also increased. In the transportation sector, whenever the demand for oil increases, it means that more people are purchasing cars. In the industrial sector, the increase in demand for oil implies an expansion in operations. An increase follows the expansion in employment opportunities and increased economic output. In both these instances, it is implied that the economy is growing.

Conversely, when the rigs are shutting down, it is usually to avoid overproduction, which might grossly distort the oil prices. This reduction in oil supply could be taken as a sign of a decrease in demand. Based on the top consumers of oil in the US, a decline in the oil demand implies that the economy is contracting.

The US Baker Hughes Oil Rig Count can also be used to show periods of economic recession and recovery. Take the example of the recent coronavirus pandemic. The pandemic resulted in nationwide lockdowns and social distancing. Virtually, transportation was halted as the majority of the population opted to work from home. Industries were shut down to depressed demand. This implied that the oil demand plummeted, which was followed by a recession of the US economy.

Source: Trading Economics

When the US economy started resuming some sense of normalcy, we can notice the US Baker Hughes Oil Rig Count increasing. This showed that the oil demand was picking up again, which means that transportations and industrial sectors were upping their operations.

Source: Trading Economics

Impact of US Baker Hughes Oil Rig Count on the USD

The value of a country’s currency depends on the fundamentals of its economy. Since the US Baker Hughes Oil Rig Count can be used as a leading indicator of the US economy, the change in the count impacts the USD.

Theoretically, an increase in the US Baker Hughes Oil Rig Count should be accompanied by an appreciating USD. The increasing count signifies that the US economy is expanding. Conversely, a decline in the count means that the US economy is contracting; hence the USD should be expected to depreciate.

Sources of Data

Baker Hughes publishes the US Baker Hughes Oil Rig Count report at the end of every working week. Trading Economics has a historical time series data of the US Baker Hughes Oil Rig Count.

How US Baker Hughes Oil Rig Count Release Affects The Forex Price Charts

The most recent publication was on October 23, 2020, at 1.00 PM EST and accessed at Investing.com. The USD is expected to experience moderate volatility when this report is published.

In the week to October 23, 2020, the number of oil rigs operating in the US was 211, increasing from 205 a week earlier.

Let’s find out how this increase impacted the USD.

GBP/USD: Before US Baker Hughes Oil Rig Count Release on October 23, 2020, 
just before 1.00 PM EST

Before the release of the US Baker Hughes Oil Rig Count, the GBP/USD pair was trading in a weak downtrend. From the above 5-minute chart, we can observe that the 20-period MA was only slightly dropping.

GBP/USD: After US Baker Hughes Oil Rig Count Release on October 23, 2020, 
at 1.00 PM EST

After the release, the pair formed a 5-minute bearish “hammer” candle. Subsequently, the pair traded in a weaker downtrend as the 20-period MA was flattening with candles forming just around it.

Bottom Line

The US Baker Hughes Oil Rig Count plays a vital role as a leading indicator of the demand for oil and oil products. As shown by the above analyses, the US Baker Hughes Oil Rig Count doesn’t significantly impact the Forex price action.

Tags Baker Hughes, Education, Forex, Forex Trading, Fundamental Analysis, Fundamental Trading, Macro Economic Indicator, trading, US Baker Hughes Oil Rig Count, US OIL

Crypto Market Analysis

Daily Crypto Review, Nov 24 – XRP’s Push to $0.9 Manipulated? Ether Breaks $600 on Amazing News

Post author By Ilija Rankovic
Post date 24 November, 2020
No Comments on Daily Crypto Review, Nov 24 – XRP’s Push to $0.9 Manipulated? Ether Breaks $600 on Amazing News

The cryptocurrency sector has spent been in the green overall, with Bitcoin consolidating and altcoins booming. The largest cryptocurrency by market cap is currently trading for $18,364, representing a decrease of 0.36% on the day. Meanwhile, Ethereum gained 4.23% on the day, while XRP gained a whopping 54.14%.

Daily Crypto Sector Heat Map

Stellar 61.98% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by XRP’s gain of 52.19% and Verge’s 37.77% gain. On the other hand, SushiSwap lost 11.14%, making it the most prominent daily loser. Quant lost 9.44% while Nexo lost 8.27%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has reduced drastically over the course of the day, with its value is currently staying at 60.06%. This value represents a 2.6% difference to the downside compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased significantly over the course of the day. Its current value is $562.75 billion, representing a $21.04billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap has stayed pretty stable today as it couldn’t break the $18,500 mark. The price has been hovering right under the level for the whole day, and even made a couple of attempts to break it but to no avail. On the other hand, this small zone of resistance and support wasn’t broken to the downside either, as a break below $18,270 could spell a retracement.

This is a prime example of uncertainty due to Bitcoin’s current level (some are taking profits while some are investing). However, trading pullbacks in a bull trend is extremely risky and should be avoided.

BTC/USD 4-hour Chart

Bitcoin’s technicals are divided, with its daily and monthly overviews showing a slight hint of bearishness alongside the bullishness that overwhelms it. In contrast, the 4-hour and weekly overviews are completely bullish.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):

Price is above its 50-period EMA and at its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (53.88)
Volume is average

Key levels to the upside Key levels to the downside

1: $18500 1: $17,850

2: $19000 2: $17,450

3: $19500 3: $17,130

Ethereum

With Ethereum’s 2.0 version 0 launch approaching, Ethereum has continued to increase in price. Today’s move was a continuation of the uptrend that started on Nov 0, additionally fueled by the announcement that the deposits required for Ethereum’s 2.0 version 0 to launch have passed the threshold. This news is a big sigh of relief for the ETH devs, as they were wondering if the protocol will reach its goal on time for the Dec 1 launch. This extremely bullish news has pushed Ethereum past $600, which it is now testing.

If Ethereum manages to successfully stay above $600, it will have very little resistance to the upside and basically trade only versus profit-taking sellers.

ETH/USD 1-hour Chart

Ethereum’s 4-hour and monthly time-frames are completely bullish, while its daily and weekly time-frames are slightly more tilted towards the neutral position.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is far above its 50-period and slightly above its 21-period EMA
Price is between its middle and top Bollinger band
RSI is coming out of the overbought territory (59.88)
Volume is above average

Key levels to the upside Key levels to the downside

1: $600 1: $510

2: $630 2: $500

3: $735 3: $490

Ripple

The fourth-largest cryptocurrency by market cap has exploded to the upside and reached over $0.90 on the US cryptocurrency exchange Coinbase only to crash back down by roughly 30% in mere seconds. This was its highest price since May 2018. The rally was apparently driven by the Coinbase users as XRP did not see the same heights on any other exchange. Bitstamp and Binance saw a high of only $0.79.

Analysts believe that this rally is a culmination of an uptrend triggered in late Oct when an anonymous whale sent an astonishing $50 million worth of XRP at the time to Bitstamp. Ever since then, XRP/USD has been seeing a strong uptrend, up by 128.63% in the past week.

Trading XRP is simply impossible at the moment due to the amount of risk associated with this type of volatility.

XRP/USD 1-hour Chart

XRP’s 4-hour and weekly overviews are completely bullish and show no signs of neutrality, while its daily and monthly overviews show slight neutrality or even slight bearishness.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is above its 50-period EMA and at its 21-period EMA
Price is slightly above its middle Bollinger band
RSI is neutral (53.65)
Volume is above average

Key levels to the upside Key levels to the downside

1: $0.79 1: $0.625

2: $0.963 2: $0.475

3: $1.01 3: $0.443

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Market Analysis

Daily F.X. Analysis, November 24 – Top Trade Setups In Forex – Consumer Confidence in Focus!

Post author By Ali B.
Post date 24 November, 2020
No Comments on Daily F.X. Analysis, November 24 – Top Trade Setups In Forex – Consumer Confidence in Focus!

On the news front, the focus will remain on the U.S. Prelim Consumer Confidence and C.B. Leading Index m/m, which are expected to report mixed outcomes and drive choppy movement in the U.S. dollar. Let’s focus on technical levels today.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.18402 after placing a high of 1.19058 and a low of 1.17997. The EUR/USD pair rose to its highest since November 9 and reversed its direction after that, and continued placing losses for the day. The decline in the EUR/USD pair despite the improved risk sentiment was due to the U.S. dollar’s strength. The risk-on market sentiment was supported by the latest optimism from various vaccine developments. In contrast, the strength in the U.S. dollar was derived from better-than-expected U.S. macroeconomic data on Monday.

A British pharmaceutical AstraZeneca announced that its potential vaccine was more than 90% effective in its clinical trials for protecting the coronavirus. The first dosage of its vaccine provides 70% protection, while the second dosage could increase the efficacy rate to 90%.

AstraZeneca also said that it would be cheaper than its rival Pfizer vaccine as it can be stored at refrigerator temperature while Pfizer’s vaccine requires a frozen temperature that could make its cost of distribution higher.

Meanwhile, the risk sentiment was also supported by the reports that the US FDA has approved the antibody-drug used by U.S. President Donald Trump last month during his treatment of coronavirus for emergency use. These optimistic reports gave the EUR/USD pair strength in the earlier session and pushed its prices to their highest since November 9.

On the data front, at 13:15 GMT, the French Flash Services PMI declined to 38.0 against the forecasted 39.2 and weighed on Euro. The French Flash Manufacturing PMI also fell to 49.1 against the projected 50.2 and weighed on Euro. At 13:30 GMT, the German Flash Manufacturing PMI raised to 57.9 against the forecasted 56.0 and supported Euro. German Flash Services PMI remained flat with the expectations of 46.2. At 14:00 GMT, Flash Manufacturing PMI from Eurozone in November raised to 53.6 from the projected 53.2 and supported single currency Euro. Flash Services PMI declined 41.3 against the expected 42.2 and weighed on Euro.

The mixed data from Eurozone related to business activity failed to provide any significant movement in EUR/USD pair while the currency pair followed the U.S. dollar movement after the release of macroeconomic data in the American session.

At 19:45 GMT, the Flash Manufacturing PMI from the U.S. in November rose to 56.7 against the projected 52.5 and supported the U.S. dollar. The Flash Services PMI surged to 57.7 against the projected 55.8 and supported the U.S. dollar. After the release of better than expected Manufacturing and Services PMI, the strong U.S. dollar exerted pressure on EUR/USD pair on Monday.

Daily Technical Levels

Support Resistance

1.1855 1.1871

1.1845 1.1877

1.1839 1.1888

Pivot point: 1.1861

EUR/USD– Trading Tip

The EUR/USD traded sharply bearish, falling from 1.1866 level to 1.1816 support level, which is extended by double bottom level. Closing of a candle over 1.1816 is supported by bullish correction, but at the same time, the EUR/USD pair may also head further higher until the 1.1866 resistance mark. On the 2 hour timeframe, the EUR/USD pair was supported by an upward trendline, which got violated on Monday, and now the same trendline is supporting EUR/USD pair. Let’s look for a selling trade below the 1.1866 level today.

GBP/USD – Daily Analysis

Meanwhile, on the data front, at 14:30 GMT, the Flash Manufacturing PMI from the U.K. raised to 55.2 against the forecasted 50.5 and supported British Pound and supported GBP/USD pair. The Flash Services PMI for November from the U.K. also raised to 45.8 against the forecasted 43.2 and supported British Pound and added gains in the GBP/USD pair.

From the U.S. side, at 19:45 GMT, the Flash Manufacturing PMI from the U.S. in November surged to 56.7 against the anticipated 52.5 and supported the U.S. dollar that capped further gains in GBP/USD pair. The Flash Services PMI rose to 57.7 against the forecasted 55.8 and supported the U.S. dollar, and GBP/USD pair lost some of its gains.

Meanwhile, on Monday, the Governor of Bank of England Andrew Bailey said that the long-term effects of a no-deal Brexit on the economy would be worse than the coronavirus pandemic’s long-term impacts. He added that he was relatively optimistic about the economy’s ability to recover from the coronavirus outbreak, but it would be more difficult to adjust with the U.K. trading with the E.U. on World Trade Organization terms.

These concerns added pressure on risk-on market sentiment and made GBP/USD pair to lost some of its earlier daily losses.

Furthermore, Prime Minister Boris Johnson confirmed that the England lockdown would be lifted on December 2, though regional restrictions would be kept to stop coronavirus spread. The second lockdown miscued the U.K. economy that the economy could slip into a double-dip recession and these concerns also added pressure on the GBP/USD pair that lost some of its earlier daily gains.

Daily Technical Levels

Support Resistance

1.3289 1.3312

1.3274 1.3320

1.3266 1.3336

Pivot point: 1.3297

GBP/USD– Trading Tip

USD/JPY – Daily Analysis

The USD/JPY pair closed at 104.544 after placing a high of 104.635 and a low of 103.681. The USD/JPY pair rose by about 100 pips on Monday after the U.S. dollar became strong across the board. The strength of the greenback was derived from the release of macroeconomic data from the U.S.

At 19:45 GMT, the Flash Manufacturing PMI from the U.S. in November raised to 56.7 against the estimated 52.5 and supported the U.S. dollar. The Flash Services PMI surged to 57.7 against the estimated 55.8 and supported the U.S. dollar that added gains in the USD/JPY pair on Monday.

The better-than-expected U.S. business activity data showed that it was expanded in November at its fastest rate in more than five years and boosted optimism about the U.S. economy’s health that lifted the U.S. dollar, and provided strength to the rising USD/JPY pair.

Other than economic data, the USD/JPY pair was also supported by the market’s rising risk sentiment. The risk sentiment was supported by the latest optimism regarding vaccine developments from different countries. AstraZeneca, the British pharmaceutical, said that its vaccine was 70% effective on the first dosage and 90% effective on the second dosage.

It also reported that it would be cost-effective also as it does not require the frozen temperature to be stored and can only be stored in a refrigerator. These optimistic reports added strength in the risk sentiment and weighed on the safe-haven Japanese Yen that ultimately added strength in the USD/JPY pair.

On Monday, another positive news was that Regeneron’s coronavirus antibody cocktail that President Donald Trump used last month when he was hospitalized with COVID-19 had been approved for an emergency authorization use by the US FDA. There were also reports that the vaccine developed by Pfizer and BioNtech will likely be approved by the US FDA by December 11 and will be available for Americans to use.

With more progress in the vaccine area, lifting the lockdown restrictions increased along with the chances for an economic recovery that raised the risk sentiment and weighed on the safe-haven Japanese Yen that added gains in the USD/JPY pair. However, the pandemic hit economy still needs further support from governments to go through the crisis, and that is why investors were hopeful that the Fed and European Central Banks would likely issue more stimulus aid in December. The USD/JPY pair will likely rise as the risk sentiment has been improved after vaccine development progress.

Daily Technical Levels

Support Resistance

103.76 103.87

103.69 103.93

103.64 103.99

Pivot point: 103.81

USD/JPY – Trading Tips

The USD/JPY has violated a choppy range of 104.056 – 103.667 level. On the higher side, a bullish breakout of 104.056 resistance can extend the buying trend until the next resistance area of 104.59 and 105.063 level. On the lower side, the support continues to hold around 104.056 and 103.667 level. The MACD suggests an overbought situation of the USD/JPY pair; thus, we should look for selling trade below 104.598 and buying above the same. Good luck!

Tags Daily Brief, EURUSD, Forex, Fundamental Analysis, GBPUSD, Support and Resistance, Technical Analysis, Technical Outlook, trading, USDJPY

Forex Signals

USD/CAD Choppy Trading in Play – Brace for a Breakout!

Post author By Ali B.
Post date 23 November, 2020
No Comments on USD/CAD Choppy Trading in Play – Brace for a Breakout!

The USD/CAD closed at 1.30921 after placing a high of 1.30967 and a low of 1.30387. The USD/CAD pair remained on the upward momentum on Friday despite the strength in WTI Crude Oil prices and the Canadian Dollar amid the positive optimism regarding the vaccines. The optimism surrounding the vaccine development from Pfizer and Moderna was also followed by Oxford, the Russian Sputnik V, and China’s Sinovac and raised the market’s risk-on sentiment that supported the risk perceived USD/CAD pair on Friday.

On the data front, at 18:30 GMT, the Core Retail Sales from Canada raised to 1.0% against the expectations of 0.0% and supported the Canadian Dollar. For September, the Retail Sales also grew to 1.1% from the forecasted 0.2% and kept the Canadian Dollar. The NHPI for October came in line with the projection of 0.8%. At 18:32 GMT, the Corporate Profits for the quarter from Canada also came in line with the anticipations of 44.9%.

The Canadian Dollar was strong across the board on Friday due to supportive macroeconomic data and the rising Crude oil prices. The WTI crude oil was higher on Friday above the $42.5 level after the increased optimism about the coronavirus vaccines from across the world. The rising crude oil prices also supported the commodity-linked currency Loonie that capped further USD/CAD pair gains.

Meanwhile, the Canadian health officials warned that daily coronavirus infections could reach 60K per day by the end of December from their current level of 4.8K if people continue to increase their number of daily contacts. The Canadian PM Justin Trudeau said that Canada saw a massive spike in cases and that there was a risk that hospitals could get overwhelmed. He also said that it was frustrating that Canadians would have to do more to contain the virus from what they did weeks ago. These virus tensions across the North kept the Canadian Dollar weak and supported the rising USD/CAD prices on Friday.

On the US dollar front, the Dollar was strong across the board as the US Federal Reserve Chairman refrained from providing any clues about further easing in the upcoming Fed meeting and supported the USD/CAD pair’s upward momentum.

Daily Technical Levels:

Support Resistance

1.3039 1.3114

1.3007 1.3157

1.2964 1.3189

Pivot point: 1.3082

The USD/CAD pair is trading sideways in between the narrow range of 1.3120 – 1.3045 level. Investors seem to wait for a solid reason to trigger a breakout of the choppy range. The idea will be take a sell USD/CAD pair below 1.3045 level until 1.2937. Conversely, the continuation of a bullish trend over 1.3120 can lead the USD/CAD pair towards 1.3245. Good luck!

Tags Forex, Fundamental Analysis, Support and Resistance, Technical Analysis, Trade Setup, USD/CAD

Crypto Market Analysis

Daily Crypto Review, Nov 23 – Ethereum Exploding as its 2.0 Update Launch Approaches; Crypto Market in the Green

Post author By Ilija Rankovic
Post date 23 November, 2020
No Comments on Daily Crypto Review, Nov 23 – Ethereum Exploding as its 2.0 Update Launch Approaches; Crypto Market in the Green

The cryptocurrency sector has spent the weekend being quite volatile as Bitcoin had a flash crash, which brought its price below $18,000, followed by a rally that brought it back above it. The largest cryptocurrency by market cap is currently trading for $18,461, representing an increase of 0.61% on the day. Meanwhile, Ethereum skyrocketed by gaining 8.13% on the day, while XRP gained 0.09%.

Daily Crypto Sector Heat Map

Waves 38.43% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Horizen’s gain of 31.65% and Numeraire’s 21.56% gain. On the other hand, Terra lost 5.45%, making it the most prominent daily loser. HedgeTrade lost 3.22% while Crypto.com Coin lost 1.65%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has reduced drastically over the course of the weekend, with its value is currently staying at 63.2%. This value represents a 2.9% difference to the downside compared to the value it had on Friday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased significantly over the course of the weekend. Its current value is $541.71 billion, representing a $34.48 billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap has spent the weekend with decently high volatility as its price managed to go from above $18,500 to $17,600 and then back above $18,500 in just one day. While this “flash crash” is behind Bitcoin, the bulls seem to be more and more wary of the new highs, and a retracement before another push towards the upside is quite possible.

Due to many people taking profits and shorting Bitcoin to hedge their portfolios, the largest currency has a hard time going up. However, trading pullbacks in a bull trend is equally as risky. Bitcoin traders would have the most chance of succeeding if they traded only long positions.

BTC/USD 2-hour Chart

Bitcoin’s technicals are semi-divided, with its daily and monthly overviews showing a slight bullish tilt with signs of bears still present. In contrast, the 4-hour and weekly overviews show no signs of bearish presence and are completely bullish.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):

Price is above its 50-period EMA and at its 21-period EMA
Price is at its middle Bollinger band
RSI is neutral (51.42)
Volume is average

Key levels to the upside Key levels to the downside

1: $18500 1: $17,850

2: $19000 2: $17,450

3: $19500 3: $17,130

Ethereum

Ethereum’s 2.0 version 0 launch is approaching, and Ethereum bulls seem to be back in the game. The second-largest cryptocurrency by market cap broke out of the ascending (red) line and pushed towards the upside, eyeing the $600 resistance level. While the rally was strong, Ethereum bulls started showing exhaustion at $580. With that being said, the move is still not considered over, and there is more opportunity to the upside.

We mentioned on Friday that Ethereum’s downside is quite defined, but that its upside isn’t. With ETH entering territory that was explored only a couple of times, the opportunity for volatility (but also slippage) is increasing.

ETH/USD 4-hour Chart

Ethereum’s 4-hour and daily time-frames are completely bullish, while its longer time-frames (weekly and monthly) are slightly more tilted towards the neutral position.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):

The price is far above both its 50-period and its 21-period EMA
Price is at its top Bollinger band
RSI is extremely overbought (72.01)
Volume is above average

Key levels to the upside Key levels to the downside

1: $600 1: $510

2: $630 2: $500

3: $735 3: $490

Ripple

The fourth-largest cryptocurrency by market cap has, just like Ethereum, had quite an amazing weekend. XRP continued its rally to the upside that began on Nov 20 and reached as high as $0.49 before starting to consolidate. While consolidating, it has seemingly created a triangle formation that should keep its price at bay before ~80% of the formation is done.

While it is quite unknown how XRP will act right now, all chances are that it will stay within the triangle formation’s bounds for some time, at least.

XRP/USD 1-hour Chart

XRP’s daily and weekly overviews are completely bullish and show no signs of neutrality, while its 4-hour and monthly overviews show slight neutrality.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):

The price is above its 50-period EMA and at its 21-period EMA
Price is slightly above its middle Bollinger band
RSI is neutral (53.65)
Volume is above average

Key levels to the upside Key levels to the downside

1: $0.476 1: $0.3328

2: $0.509 2: $0.3244

3: $0.792 3: $0.31

Tags bitcoin, BTC, Crypto, Crypto Trading, cryptocurrency, Daily Brief, ETH, Ethereum, Fundamental Analysis, Ripple, Technical Analysis, trading, XRP

Forex Market Analysis

Daily F.X. Analysis, November 23 – Top Trade Setups In Forex – PMI Figures in Highlights!

Post author By Ali B.
Post date 23 November, 2020
No Comments on Daily F.X. Analysis, November 23 – Top Trade Setups In Forex – PMI Figures in Highlights!

On the news front, eyes will remain on the Manufacturing PMI and Services PMI figures from the Eurozone, the U.K., and the United States. Almost all economic figures are expected to perform better than previous months, perhaps due to a lift of lockdown. Price action will depend upon any surprise changes in the PMI figures.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.18563 after placing a high of 1.18906 and a low of 1.18495. Despite vaccine-related optimism and improved risk sentiment in the market, the currency pair EUR/USD dropped on Friday amid the continuous rise in the number of coronavirus cases along with the latest disagreement between the Fed and U.S. Treasury related to the unused funds of emergency lending programs.

On Thursday, U.S. Treasury Secretary Steven Mnuchin sent a letter to Fed’s Chair Jerome Powell and asked him to return the unused funds in five emergency lending programs that will expire in December. Mnuchin claimed that those funds could be used for other purposes by Congress. Mnuhcin also asked Powell to extend the other four emergency credit facilities.

Meanwhile, the U.S. coronavirus situation got worse as November was not still over, but there have been almost 3 million new cases reported. It is about a quarter of all the U.S. cases since the beginning of the pandemic. The U.S. hospitalization rate was getting higher to an alarming level as it was forcing the health care system to reduce care for even non-COVID-19 patients.

Given the coronavirus situation in the U.S., many states announced restrictive measures to control the spread. On the European side, the situation was a bit under control after the strict lockdown measures. However, the old continent’s situation in Europe was far from getting better, and market players were worried that a steep economic downturn would be seen in the last quarter of the year.

These tensions raised the concerns that economic recovery was under pressure and supported the safe-haven appeal that ultimately weighed on the risk perceived EUR/USD pair on Friday. Furthermore, central banks’ calls for another round of stimulus measures to help support the economy started to increase. In response, the Federal Reserve Chairman Jerome Powell has been refrained to give any hint about any action in December whereas, his European counterpart Christine Lagarde has said that a large easing package will be coming in the next meeting. Lagarde’s comments also weighed on the single currency that ultimately added losses in the EUR/USD pair on Friday.

At 12:00 GMT, The German PPI for October remained flat at 0.1% on the data front. At 19:50 GMT, the Consumer Confidence also came in line with the expectations of -18. There was no macroeconomic figure to be released from the U.S., which means the pair EUR/USD was unaffected by any data on Friday.

Meanwhile, the vaccine news from Pfizer and BioNtech that they were going to apply for US FDA approval for emergency authorization use of their vaccine raised the risk sentiment in the market. Combined with this optimism, the other companies, including Moderna, Oxford, the Russian Sputnik V, and China’s Sinovac, also provided updates about the vaccine’s efficacy and supported the market’s risk of improved sentiment that ultimately capped further losses in the EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1831 1.1898

1.1790 1.1924

1.1764 1.1965

Pivot point: 1.1857

EUR/USD– Trading Tip

The EUR/USD is trading with a bearish bias at the 1.173 level, forming an ascending triangle on the 2-hour timeframe. On the lower side, the pattern supports the EUR/USD pair at 1.1850, and here violation of the 1.1850 level can extend the EUR/USD pair towards the 1.1816 level. On the higher side, a bullish breakout of the 1.1889 level can extend the buying trend until the 1.1924 level. The bullish bias remains dominants today as the MACD and 50 periods EMA support a bullish trend. Let’s consider taking a buying trade over 1.1889 with a take profit of 1.1924 level.

GBP/USD – Daily Analysis

The GBP/USD pair closed at 1.32891 after placing a high of 1.32977 and a low of 1.32403. GBP/USD remained bullish on Friday amid the latest Brexit optimism and the coronavirus vaccine’s rising hopes. The currency pair remained on the upper track this week as Brexit dominated the scene and supported the British Pound. The coronavirus situation in the U.K. was improving as the U.K. was set to announce a wide easing of coronavirus rules for a week at Christmas.

Next week, Boris Johnson will announce a plan for an easing of rules on Covid, and he also warned that the level of restrictions for the rest of next month would depend on how well the public obey the current lockdown in England that will end on 2nd December. Brexit headlines were, however, contradictory during the week as PM Boris Johnson signaled that the U.K. would prosper without a deal and E.U. officials indicated that talks could collapse. The British press talked about a French compromise on the fisheries issue that a key sticking point in the Brexit deal. After the French compromise on fisheries, the Brexit optimism continued supporting the British Pound and added gains in GBP/USD pair.

Another factor involved in the GBP/USD’s bullish sentiment, Pfizer and BioNtech said that they would apply for approval of emergency use of their vaccine on Friday, which also helped risk sentiment improve and support the British Pound. Following Pfizer, Moderna also said that its vaccine was 94.5% effective in preventing the coronavirus and helped raise the market’s optimism that also supported the GBP/USD pair’s upward trend.

On the data front, at 05:01 GMT, GfK Consumer Confidence remained flat with the forecasted -33. At 12:00 GMT, the Retail Sales from the U.K. for October raised to 1.2% against the expected -0.3% and supported British Pound that added further gains in GBP/USD pair. The Public Sector Net Borrowing declined to 21.6 against the forecasted 31.6B and kept British Pound and added improvements in the currency pair GBP/USD pair.

Meanwhile, in the U.S., the need for a stimulus package increased with the rising coronavirus cases, but Fed Chairman Jerome Powell refrained from giving any hint about further aid in the upcoming December meeting. The hospitalization in the U.S. for coronavirus patients increased to a worse level, forcing many state governors to announce restrictive measures to control the virus’s spread. It weighed on the U.S. dollar and helped GBP/USD pair to post gains on Friday.

Daily Technical Levels

Support Resistance

1.3211 1.3296

1.3161 1.3331

1.3127 1.3381

Pivot point: 1.3246

GBP/USD– Trading Tip

The GBP/USD continues trading bullish at the 1.3307 level, holding over the 1.3303 support level, supporting the buying trend. The recent bullish engulfing candle on the 2-hour timeframe can lead Sterling further higher until the 1.3368 area. The MACD and RSI have crossed over on the higher side, suggesting further odds of bullish trend continuation. Typically such kind of ascending trend breakout can lead the pair further higher, so let’s consider taking buying trade over the 1.3307 level today.

USD/JPY – Daily Analysis

The USD/JPY pair closed at 103.823 after placing a high of 103.909 and a low of 103.700. After falling for six consecutive days, the USD/JPY pair posted small gains on Friday amid the reports about the resumption of the U.S. fiscal aid talks. The small uptick in the USD/JPY pair after massive selling in the previous six days could be solely attributed to optimism led by reports that U.S. lawmakers have agreed to resume talks on another coronavirus stimulus package.

The positive sentiment was somehow offset by the U.S. Treasury Secretary Steven Mnuchin’s decision to end some pandemic relief for struggling businesses. This came in after the tensions increased about the potential economic fallout from the continuous rise in new coronavirus cases, which held the U.S. dollar bulls from placing aggressive bets.

Meanwhile, the safe-haven appeal came back in the market after the number of coronavirus cases started to increase in the U.S. On Thursday, the U.S. reported about 185,000 cases of coronavirus in a single day and set a record. The number of hospitalized patients in the U.S. also increased by almost 50% in just the last two weeks that eventually urged many states to impose new restrictions to stop the virus from spreading further.

Meanwhile, the Governor of California imposed a 10 PM curfew in most populated U.S. states that will take effect from Saturday. Moreover, the Centre for Disease Control advised Americans not to travel on Thanksgiving holiday as it would increase the infection rate. These concerns added uncertainty in the market and raised a safe-haven appeal that supported the safe-haven Japanese Yen and capped the USD/JPY pair’s gains on Friday.

There was no macroeconomic data from the U.S. on Friday, and from Japan, at 04:30 GMT, the National Core CPI for the year from Japan remained flat with the anticipations of -0.7%. The macroeconomic data failed to impact on currency pair USD/JPY.

Pfizer and BioNtech announced on Friday that they would apply on the day to the US FDA for approval of emergency use of their vaccine on the vaccine front. This, combined with the other companies, included AstraZeneca and Oxford University’s latest reports of their vaccine’s efficacy, added strength in the risk sentiment, and supported the USD/JPY pair’s gains on Friday.

Daily Technical Levels

Support Resistance

103.56 104.07

103.38 104.40

103.04 104.58

Pivot point: 103.89

USD/JPY – Trading Tips

The USD/JPY extends its bearish trend below the 104.102 level, consolidating within a narrow trading range 104.102 – 103.650. On the lower side, the USD/JPY pair is likely to find support at the 103.650 level, and violation of this level can also extend further selling bias until 103.227. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.400 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck!

Tags Daily Brief, EURUSD, Fundamental Analysis, GBPUSD, Support and Resistance, Technical Analysis, Technical Outlook, trading, USDJPY

Forex Fundamental Analysis

US 10-Year TIPS Auction – Everything About This Macro Economic Indicator

Post author By Reddy Shyam Shankar
Post date 21 November, 2020
No Comments on US 10-Year TIPS Auction – Everything About This Macro Economic Indicator

Introduction

For any long-term investment, taking the future rate of inflation into account is paramount. The reason for this is because inflation eats into the expected returns. Thus, if you could find a way to insulate your investments from this, you most definitely will. The goal of any inflation-protected investment is to ensure that you are cushioned from the reduction in the purchasing power.

Understanding the US 10-Year TIPS Auction

TIPS refers to Treasury Inflation-Protected Securities. As the name suggests, these are US government-issued securities meant to provide investors with protection against the effects of inflation.

US 10-Year TIPS are Inflation-Protected treasury bonds issued by the US Department of the Treasury. The principal on these bonds is meant to finance spending activities by the US government and is redeemable after ten years.

TIPS auction refers to the sale of the inflation-protected treasury bonds by the US Department of Treasury. Originally, the 10-Year US TIPS are auctioned twice a year – in January and July. The reopening auctions are done in March, May, September, and November. Thus, these auctions are scheduled every two months.

Discount rate: The percentage difference between the price at which the TIPS is bought at auction and the one at which it can be redeemed.

Maturity: For the US Treasury Inflation-Protected Securities, the maturity period refers to the maximum time an investor can hold the bonds before redemption. These bonds are usually issued with a maturity period of 5, 10, and 30 years from the auction date. Usually, the minimum duration of ownership is 45 days. Therefore, one can choose to sell their TIPS before maturity or hold them until maturity.

How to Buy TIPS

TIPS can only be bought in electronic form. The minimum amount of TIPS one can purchase is $100 and increments of $100 after that. The maximum amount that a bidder can purchase in a single auction is $5 million. During the auction, the interest rate on the TIPS is determined by the competitive buyers.

The competitive bidders usually specify the yield that they are willing to accept. The competitive bidders for TIPS are large buyers such as brokerage firms, investment firms, and banks. The competitive bidders set the yield for the TIPS, which requires one to have an in-depth knowledge of the money markets. Competitive bidders are required to submit the number of TIPS they intend to buy and the return on investment they seek. This return is the discount rate.

Not all competitive bids are accepted at the auction. When the competitive bid is equal to the high yield, less than the full amount wanted by an investor might be accepted. The bid might be entirely rejected if it is higher than the yield accepted during the auction. The non-competitive bidders are regarded as “takers” of the yield set by the winning competitive bidders.

Once the bidding process is over, the treasury distributes the issuance. Let’s say, for example, that in an auction, the US Department of Treasury is auctioning $20 billion worth of TIPS. If the non-competitive bids are worth $5 billion, they are all accepted. The remaining $15 billion is then distributed among the competitive bidders. The lower competitive bids are filled first until the $15 billion is exhausted.

Using the US 10-Year TIPS Auction for Analysis

Since the TIPS’s primary goal is to safeguard against the effects of inflation, the interest rate paid on them can be used as an indicator of possible inflation rates in the future.

Before we explain how the US 10-year TIPS auctions can be used for analysis, here are two things you need to keep in mind.

TIPS’s interest rate is paid semi-annually at a fixed rate, which is usually based on the adjusted principal.
Whenever inflation rises, the interest rate rises, and when there is deflation, the interest rate drops.

Once TIPS have been auctioned and traded in the secondary market, when inflation in the economy rises, the principal on TIPS increases as well. Thus, the interest rate payable on these TIPS increases as well. During the TIPS’ subsequent issues, the interest rate payable will reflect the prevailing rate of inflation. Furthermore, the discount rate set at the auctions can be used to gauge the level of confidence that investors have in the US economy. The lower discount rate shows that the current investment atmosphere in the economy is risky; hence, investors are willing to take lower returns than risk losing their principal in other markets.

On the other hand, when investors can get better returns in other markets within the economy, they would demand a higher discount rate. Furthermore, when there is deflation in the economy, the principal on the TIPS falls along with the interest rates payable.

Impact on Currency

Theoretically, the auction of the US 10-year TIPS can impact the currency in two ways. By showing the confidence level in the economy and by showing the prevailing rates of inflation.

When the interest rate payable on the TIPS increases, it shows that the levels are increasing. This increase shows that the economy is growing, which is good for the currency. Furthermore, the higher discount rate at auctions implies that investors can get better rates elsewhere in the economy.

Conversely, the currency will depreciate relative to others when TIPS’s interest rate decreases, which implies that there is deflation in the economy. This instance can also play out if discount rates at the auction are at historical lows. It shows that the economy is performing poorly and that investors may not get better returns elsewhere.

Sources of Data

US Department of Treasury is responsible for the auction of the US 10-year TIPS. The data of the latest TIPS auction can be accessed from Treasury Direct. Treasury Direct also publishes data on the upcoming TIPS auction, which can be accessed here.

St. Louis FRED publishes an in-depth series of the US 10-year TIPS.

Source: St. Louis FRED

How US 10-Year TIPS Auction Affects the Forex Price Charts

The most recent auction of the US 10-year TIPS was on September 17, 2020, at 1.00 PM EST. The data on the auction can be accessed at Investing.com. The US 10-Year TIPS auction is expected to have a low impact on the USD, as shown by the screengrab below.

During the recent auction, the rate for the 10-year TIPS was -0.996% compared to -0.930% on the July auction.

Let’s see what impact this release had on the USD.

EUR/USD: Before US 10-Year TIPS Auction on September 17, 2020, 
Just Before 1.00 PM EST

Before the auction, the EUR/USD pair went from trading in a steady uptrend to a subdued uptrend. The 20-period MA can be seen going from a steep rise to almost flattening as the candles formed just above it.

EUR/USD: After US 10-Year TIPS Auction on September 17, 2020, at 1.00 PM EST

Immediately after the release of the auction data, the pair formed a 5-minute “Doji” candle. Subsequently, the EUR/USD pair continued to trade in the subdued uptrend with candles forming just above an almost flattened 20-period MA.

Bottom Line

From these analyses, we can establish that the US 10-year tips auction has no significant impact on the forex price charts. The reason for this could be because most forex traders do not keep an eye on bond auctions but instead focus on more mainstream indicators like the CPI and GDP.

Tags Education, Forex, forex analysis, Forex Trading, Fundamental Analysis, Indicators, Macro Economic Indicators, TIPS, trading, US 10-Year TIPS Auction