Tag: Fundamental Analysis

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Forex Signals

AUD/USD Bounces off Support 0.7155 – Good time to go long?

The AUD/USD pair was closed at 0.71864 after placing a high of 0.72218 and a low of 0.70484. The pair AUD/USD rose to its highest since 12th October on Wednesday amid the U.S. political uncertainty after the election results seemed tighter than expected.

The AUD/USD pair was closed at 0.71864 after placing a high of 0.72218 and a low of 0.70484. The pair AUD/USD rose to its highest since 12th October on Wednesday amid the U.S. political uncertainty after the election results seemed tighter than expected.

The AUD/USD pair was closed at 0.71864 after placing a high of 0.72218 and a low of 0.70484. The pair AUD/USD rose to its highest since 12th October on Wednesday amid the U.S. political uncertainty after the election results seemed tighter than expected.

The AUD/USD pair first declined sharply on Wednesday amid the recent decision of RBA to cut its interest rates to 0.10% from the 0.25% and weighed on Aussie. The RBA also announced its plans to buy A$200 billion government bonds with maturities of around 5-10 years over the next six months.

However, the losses in AUD/USD pair were reversed, and the par started to post gains as the U.S. dollar started losing its gains in late trading session as the U.S. election results delayed and raised uncertainty. The markets started moving with the threats of lawsuits and recounting of votes that would go on for a couple of days and delay the final election results.

The declining U.S. dollar helped the AUD/USD pair to raise its prices and move in the upward direction on Wednesday. On the data front, at 02:30 GMT, the AIG Construction Index for October raised to 52.7 against the previous 45.2. At 05:30 GMT, the Retail Sales for September came in as -1.1% against the forecasted -1.5% and supported the Australian dollar that added strength to AUD/USD pair.

At 18:15 GMT, the ADP Non-Farm Employment Change for October plunged to 365K against the predictable 650K and weighed on the U.S. dollar that ultimately supports the AUD’s upward momentum/USD pair. At 18:30 GMT, the Trade Balance from the U.S. for October remained flat with the anticipations of -63.9B. 

At 19:45 GMT, the Final Services PMI for October rose to 56.9 from the estimated 56.0 and supported the U.S. dollar. At 20:00 GMT, the ISM Services PMI for October fell to 56.6 from the predictable 57.4 and weighed on the U.S. dollar that added further strength to AUD/USD pair.


Daily Technical Levels

Support Resistance

0.7066 0.7215

0.6972 0.7270

0.6917 0.7364

Pivot point: 0.7121

The AUD/USD continues trading sideways, facing immediate resistance at the 0.7160 level along with a support area of 0.7140. The bullish breakout of the 0.7190 level can extend the buying trend until the 0.7220 level. Conversely, the bearish breakout of the 0.7140 level can drive selling bias until 0.7060. Eyes stay on the U.S. elections outcome. Good luck! 

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Forex Market Analysis

Daily F.X. Analysis, November 05 – Top Trade Setups In Forex – Eyes on U.S. Election Results! 

On the news front, the eyes will remain on the outcome of the U.S. elections, although Joe seems to be the next president of the United States considering the voting lead against Trump so far. Besides, the Monetary Policy decision from the Bank of England will remain in highlights. The BOE isn’t expected to make any changes in the policy; however, the press conference will be worth watching. The muted impact is expected on the news. Lastly, the Unemployment Claims from the U.S. may support the U.S. dollar today.

On the news front, the eyes will remain on the outcome of the U.S. elections, although Joe seems to be the next president of the United States considering the voting lead against Trump so far. Besides, the Monetary Policy decision from the Bank of England will remain in highlights. The BOE isn’t expected to make any changes in the policy; however, the press conference will be worth watching. The muted impact is expected on the news. Lastly, the Unemployment Claims from the U.S. may support the U.S. dollar today.

On the news front, the eyes will remain on the outcome of the U.S. elections, although Joe seems to be the next president of the United States considering the voting lead against Trump so far. Besides, the Monetary Policy decision from the Bank of England will remain in highlights. The BOE isn’t expected to make any changes in the policy; however, the press conference will be worth watching. The muted impact is expected on the news. Lastly, the Unemployment Claims from the U.S. may support the U.S. dollar today.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17227 after placing a high of 1.17706 and a low of 1.16025. After falling to its lowest since mid-July, the EUR/USD pair reversed and started to rise and ended Wednesday with gains. The EUR/USD pair has been having a highly volatile week so far as uncertainty around the U.S. 2020 Presidential Election intensifies. Results have been tighter than the market’s expectations, and investors felt hesitant to sell the safe-haven U.S. dollar.

On Wednesday, the U.S. dollar rally kept the EUR/USD pair under pressure and made it hard to sustain gains Wednesday as both share a negative correlation. Moreover, the Eurozone’s coronavirus situation also worsened as the pandemic’s second wave raised across the bloc and forced many major economies, including Germany and France, to re-introduce fresh restrictions and lockdown measures.

In turn, the ECB has been signaling that it could introduce a new monetary policy stimulus that only added in the weakness of Euro currency and kept the gains in EUR/USD pair limited on Wednesday.

On the data front, at 13:00 GMT, the Spanish Unemployment Change for October came in as 49.6K compared to the previous -26.3K. At 13:15 GMT, the Spanish Services PMI for October raised to 41.1 from the forecasted 40.0 and supported Euro and added further in EUR/USD air’s gains. AT 13:45 GMT, the Italian Services PMI for October declined to 46.7 against the forecasted 47.4 and weighed on Euro.

 At 13:50 GMT, the French Final Services PMI remained flat at 46.5. At 13:55 GMT, the German Final Services PMI raised to 49.5 against the forecasted 48.9 and supported the single currency Euro. At 14:00 GMT, the Final Services PMI from the whole bloc for October also surged to 46.9 against the forecasted 46.2 and supported the single currency Euro and added further upside momentum to EUR/USD pair.

From the U.S. side, at 18:15 GMT, the ADP Non-Farm Employment Change for October dropped to 365K against the estimated 650K and weighed on the U.S. dollar that added strength to the upward momentum of the EUR/SD pair. At 18:30 GMT, the Trade Balance from the U.S. for October came in line with the expectations of -63.9B. At 19:45 GMT, the Final Services PMI for October surged to 56.9 from the projected 56.0 and supported the U.S. dollar and capped further gains in EUR.USD pair.

At 20:00 GMT, the ISM Services PMI for October fell to 56.6 from the anticipated 57.4 and weighed on the U.S. dollar and provided support to the rising EUR/USD pair.

The U.S. dollar is a safe-haven currency that tends to rise during uncertain environment and in the U.S. 2020 Presidential Election, the fears that election result could be close or contested, it led to a rise in the safe-haven demand and the U.S. dollar, that ultimately added pressure on EUR/USD pair.

Daily Technical Levels

Support    Resistance

1.1650      1.1757

1.1588      1.1802

1.1543      1.1864

Pivot point: 1.1695

EUR/USD– Trading Tip

The EUR/USD is trading sideways, with a wide trading range of 1.1615 to 1.1760 area as the U.S. elections keep the markets on the move. On the lower side, the bearish breakout of the 1.1615 area can extend selling until the next support area of the 1.1591 level. The release of European services PMI data may support the pair; elsewhere, the outcome of elections may drive further market movement. The MACD is entering the selling zone, but we may not see further selling until the 1.1615 level gets violated. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29142 after placing a high of 1.31401 and a low of 1.29839. The broad-based U.S. dollar strength added pressure on GBP/USD pair and kept it on the bearish track on Wednesday.

The uncertainty surrounding the U.S. election results increased after the race to White House became tighter than anticipation. However, the results from key battle states like Wisconsin, Michigan, and Pennsylvania were delayed. This uncertainty forced investors to hold onto their U.S. dollar positions and weighed on GBP/USD pair.

On the previous day, the markets were moving on Biden recovery expectations, but as results from different states were announced, the election results became tighter. Chances for a divided government increased, and the blue wave decreased that raised the U.S. dollar onboard and weighed on GBP/USD pair.

On the data front, at 14:30 GMT, the Final Services PMI for October fell to 51.4 against the estimated 52.3 and weighed on British Pound. From the U.S. side, at 18:15 GMT, the ADP Non-Farm Employment Change for October fell to 365K against the expected 650K and weighed on the U.S. dollar. At 18:30 GMT, the Trade Balance from the U.S. for October came in line with the anticipations of -63.9B. At 19:45 GMT, the Final Services PMI for October rushed to 56.9 from the estimated 56.0 and supported the U.S. dollar and weighed on GBP/USD pair. At 20:00 GMT, the ISM Services PMI for October declined to 56.6 from the projected 57.4 and weighed on the U.S. dollar.

In the U.K., the lawmakers approved a one-month lockdown for England as the coronavirus cases were continuously increasing. On Wednesday, the U.K. reported 25,177 new cases in a single day against Tuesday’s 20,018. The British Pound came under fresh pressure after these depressing highlights from the U.K. and added further losses in GBP/USD pair.

The Bank of England will release its monetary policy decision on Thursday. The uncertainty about the decision of BoE also increased with the escalated version of the coronavirus pandemic. The Bank is expected to keep rates stable, but as the lockdowns are re-introduced banks could change its decision and announce further easing. These uncertainties also kept the local currency under pressure and kept weighing on GBP/USD pair.

Daily Technical Levels

Support   Resistance

1.2913      1.2941

1.2898      1.2954

1.2884      1.2969

Pivot point; 1.2926

GBP/USD– Trading Tip

Just like the EUR/USD, the GBP/USD is also trading sideways in between a narrow trading range of 1.3122 – 1.2940 area. The Cable has recently violated the downward channel, supporting the GBP/USD pair around the 1.2940 level. Above this level, the odds of buying remain strong today. On the higher side, the Sterling may find next resistance around 1.3122 while the bearish breakout of 1.2940 may lead the Cable towards the 1.2855 level. A choppy session is expected today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.517 after placing a high of 105.343 and a low of 104.149. The USD/JPY pair moved upward towards its 11-days highest level on Wednesday but it lost most of its daily gains in the late trading session.

The primary driver of the USD/JPY pair was the USD’s market valuation on Wednesday. As the early election results showed that the blue wave was un-likely, it supported the safe-haven U.S. dollar and pushed the USD/JPY pair higher. The U.S. Dollar Index (DXY) also rose on Wednesday and moved to the 94.30 level.

As the markets were moving in previous days over the chances of Biden victory, after tighter election results, the chances for divided government increased and weighed on market sentiment. The hopes for larger stimulus also faded away with the declining hopes of the blue wave and the U.S. dollar gained through it and supported a strong bullish move on Wednesday.

However, on late night Tuesday, when it was clear that there will not be a winner, President Trump falsely claimed victory when millions of votes were still uncounted in the tight presidential race. This weighed on the U.S. dollar and the pair USD/JPY started to rise.

On the data front, at 18:15 GMT, the ADP Non-Farm Employment Change for October dropped to 365K against the projected 650K and weighed on the U.S. dollar. At 18:30 GMT, the Trade Balance from the U.S. for October remained flat with the expectations of -63.9B. At 19:45 GMT, the Final Services PMI for October raised to 56.9 from the projected 56.0 and supported the U.S. dollar. At 20:00 GMT, the ISM Services PMI for October dropped to 56.6 from the expected 57.4 and weighed on the U.S. dollar.

Meanwhile, the Bank of Japan released its monetary policy meeting of September on Wednesday that showed that some policymakers called for deeper scrutiny on how to address the fallout from the coronavirus pandemic as the economic outlook remained highly uncertain.

Many in the nine-member board agreed that it was sufficient to maintain the current ultra-loose monetary policy, for now, to cushion the economic blow from the pandemic. But some saw the need to debate how the BOJ could re-shape its policy in an era where the population must balance the need to contain the virus and sustain economic activity.

The Bank of Japan Governor Haruhiko Kuroda has said that the central bank’s focus will be on providing liquidity to cash-strapped firms hit by the pandemic. He has also indicated that deeper debate on how to achieve its 2 percent inflation target will be put on the back burner—these added strengths in the Japanese Yen and capped gains in the USD/JPY pair on Wednesday.

Daily Technical Levels

Support   Resistance

104.32      104.71

104.19      104.95

103.94      105.09

Pivot point: 104.57

USD/JPY – Trading Tips

The USD/JPY is trading choppy in between a wide trading range of 105.64 to 104.420 level. Violation of these ranges may determine the next trend in the USD/JPY pair. A bullish breakout of 105.062 level can extend the buying trend until 105.590. Conversely, the bearish breakout of 104.426 can lead the USD/JPY pair towards the 104 area. The MACD is also showing mixed bias among investors; therefore, let’s wait for a breakout before taking the next position in the USD/JPY. Good luck! 

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Crypto Videos

Best Free Bitcoin Indicator Ever Gaining Over 5000% Returns! Free Indicator In The Description!

https://youtu.be/HUwTDvz5xt0

https://youtu.be/HUwTDvz5xt0

 

Best Bitcoin Indicator Ever? 5000% Returns

Bitcoin’s mining is adjusted for difficulty every 2016 blocks, which translates to roughly every two weeks.
However, Bitcoin’s effective Hash Rate is being calculated daily and is based on the number of blocks found by the miners each day. Because when the hash rate and mining difficulty are calculated, the difficulty effectively may lag behind the hash rate by a maximum of two weeks. The difficulty is, therefore, a somewhat lagging indicator for miner capitulation.

When looking at how ribbons work, we can notice the green and blue simple moving average lines of the difficulty and hash rate on the ribbon indicator. When they cross each other, miners are considered to be “capitulating.” On top of that, most times, the chart will show that there is roughly a two-week lag from the hash rate identifying miner capitulation to the difficulty identifying capitulation. The simple moving average periods chosen are not that important, and the same effect can be seen regardless of the periods used.
However, miner capitulation periods can last for weeks. As a result, the lag between mining difficulty and hash rates doesn’t have such a huge impact on the Bitcoin investor, but rather just on traders.

The hash ribbon indicator

Because of the effect of negative sentiment as well as price action during bear markets and times where miners reach capitulation, the best time to buy Bitcoin is somewhere in the middle of the “miner capitulation” period. However, this cannot be fully known until after the fact.
A simple 1- and 2-month period simple moving average of Bitcoin’s Hash Rate can be used to, with great accuracy, identify market bottoms, miner capitulation, and even great times to buy Bitcoin. The moment when the 1-month hash rate SMA crosses over the 2-month hash rate SMA, the worst of the miner capitulation is over most of the time, and the recovery has begun. Initiating a buy at these points in time yields incredible results so far.

Of the 9 historic buy signals in the table shown, the average gain to the next market cycle peak, which was historically less than 3 years away, is over a whopping 5000%. Returns are even greater than shown in the table for positions held indefinitely.
What is interesting is the drawdown through all time. The average maximum drawdown for each of these entries is a mere 11%. These results are achieved without considering anything else but this indicator. No indicators, metrics, or intelligence, rather just two simple moving averages on Bitcoin’s hash rate.
We have to note that there is one “bad” purchase, which dates to January 2015, where a maximum drawdown of 42% occurred. However, this is still considerably less than half of Bitcoin’s various 80%+ drawdowns. Nonetheless, the majority of drawdowns can be eliminated by simply adding a price action indicator. This indicator could include the famous Bitcoin 10-day and 20-day SMA cross over, for example.

Purchasing Bitcoin during miner capitulation, as the hash rates are starting to “recover” combined with buying only once price momentum has gone positive, yields insanely good results.
As shown, the maximum drawdown is reduced significantly, while the returns have stayed relatively the same. The difference between the first and second table is made possible with the simple addition of the price momentum indicator and using these two indicators as a signal to purchase Bitcoin.

This brings us to the question of can you use this indicator often. Miner Capitulation doesn’t happen that often: in fact, it happens only once per year on average. However, it has started to occur a bit more often in 2020, which may be a great thing for Bitcoin investors.

This indicator has proven itself a great tool for finding Bitcoin bottoms, while it does need help when it comes to timing the sale of the previously bought coins. Hash ribbons should be one of the key components of every Bitcoin trader’s tool belt, simply due to its amazing track record.

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Forex Videos

How Forex traders factor in President Trump – The Enemy Of Predictability!

https://youtu.be/6srucqCYqNg

https://youtu.be/6srucqCYqNg

How do traders factor in President Trump?

 

Thank you for joining this forex academy educational video.
In this session, we will be looking at how President Donald Trump affects the financial markets and what precautions traders have to take since he came to power.
First of all, we need to remind ourselves that President Trump has never been a politician, he has never been a diplomat, and some members of the democratic party in the United States, and a lot of other people besides, might argue that he doesn’t have a diplomatic bone in his body.
President Trump inherited a fortune from his late father and made himself a name in reality TV. He has brought a certain element of reality TV to his presidency. Often his style is considered to be chaotic, argumentative, belligerent. He has been accused of lying, and the democratic party tried to have him impeached halfway through his presidency.

Certainly, there seems to be a great deal of animosity between himself and the speaker of the House, Nancy Pelosi, who, not happy with losing the opportunity to have him impeached halfway through his term in office, is now working to have him removed from office over concerns about his inability to run the office. Where, under the 25th Amendment, should she succeed, vice president Pence would take over.

This will only serve to cause more friction between the pair. And when Donald Trump’s cage is rattled, he tends to be reactive, which may be causing the delay to the proposed stimulus bill. The longer is stalled, the more it will adversely affect Americans and American companies. The current impasse between the republicans and the democrats is the difference between 1 trillion or 2 trillion dollars. Surely it would make sense to at least start with the smaller of the two amounts and build from there, rather than make people suffer.
And one has to ask if this is a personal vendetta because it certainly seems to be a power struggle. And of course, this is all a part of Donald trump’s leadership style: one day he says there will be a stimulus bill, the next day he says there will not be a stimulus bill until the US Presidential election is over. This, of course, affects the United States stock markets. The knock-on effect is felt by other global markets and numerous assets, including treasuries, bonds, and of course, it is also affecting the United States dollar and every currency traded against the dollar.

But singularly, the most disruptive way that Trump affects the financial markets is his use of Twitter. With a single tweet, Donald Trump can move markets dramatically, where in years past, high-level economic data releases have been subject to an embargo. President Trump will simply issue a tweet at any time he sees fit, the consequences of which can cause the financial markets to suffer extreme volatility, with some traders benefiting and, of course, many others losing money because of this style alone.
And so, if you are relatively new to trading, we suggest you add President Trump to your Twitter feed to keep abreast of his tweets, or better still, only trade when he is in bed asleep. Remember to expect the unexpected from him.

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Forex Market Analysis

Daily F.X. Analysis, November 04 – Top Trade Setups In Forex – Eyes on U.S. Election Results! 

On the news front, the market is exhibiting mixed but sharp movements in the wake of U.S. elections. Democratic party’s Joe Biden seems to take the lead so far, and his winning remains solid. The market is exhibiting safe-haven appeal in the wake of election results. Besides, the European economy is due to release Services PMI figures that may drive some price action in the market, but most of it is likely to be overshadowed by the U.S. election outcome. 

On the news front, the market is exhibiting mixed but sharp movements in the wake of U.S. elections. Democratic party’s Joe Biden seems to take the lead so far, and his winning remains solid. The market is exhibiting safe-haven appeal in the wake of election results. Besides, the European economy is due to release Services PMI figures that may drive some price action in the market, but most of it is likely to be overshadowed by the U.S. election outcome. 

On the news front, the market is exhibiting mixed but sharp movements in the wake of U.S. elections. Democratic party’s Joe Biden seems to take the lead so far, and his winning remains solid. The market is exhibiting safe-haven appeal in the wake of election results. Besides, the European economy is due to release Services PMI figures that may drive some price action in the market, but most of it is likely to be overshadowed by the U.S. election outcome. 

Economic Events to Watch Today  

 


 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17198 after placing a high of 1.17396 and a low of 1.16297. The EUR/USD pair surged on Tuesday and recovered some of its previous daily losses of 6 consecutive sessions. The pair climbed to 1.1739 level on U.S. Election Day as the U.S. dollar was down by 0.83% on the day, and the U.S. Dollar Index was trading at a six-day lower level under 93.40. The improvement in the market sentiment could be attributed to the declining expectations of any outcome of a disputed election that could result in a legal battle, political and social tension.

The rise in EUR/USD pair’s prices was also because of the anticipations of a so-called Blue wave outcome of the U.S. election. As the victory of Joe Biden would have a negative impact on the U.S. dollar amid his intentions to deliver a massive stimulus package after his victory, the EUR/USD pair gained further and rose to its three days highest level on Tuesday.

Apart from the U.S. election, rally in EUR/USD pair continued on the day due to risk appetite after European Central Bank reported that Pandemic Emergency Purchase Programme (PEPP) would likely remain the main instrument to increase the stimulus at the next meeting as the ECB has already committed to act in December and has not ruled out using all available instruments. However, the virus spread and the subsequent lockdowns could weigh on EUR/USD pair in the coming days.

On Tuesday, France reported the highest death toll since April, and both Netherlands and Hungary announced new virus lockdowns. These concerning situations in Eurozone related to the coronavirus pandemic kept the gains in EUR/USD pair limited on Tuesday.

On the data front, the French GOV Budget Balance was released at 12:45 GMT that came in as -161.6B for September compared to Previous -165.7B. From the U.S. side, the Wards Total Vehicle Sales dropped to 16.2M from the expected 16.5M and weighed on the U.S. dollar that ultimately added further gains in EUR/USD pair on Tuesday.

The main driver of the EUR/USD pair remained the U.S. dollar on the U.S. Election Day on Tuesday that was under pressure in the uncertain environment and continued supporting the EUR/USD pair’s upward momentum,

Daily Technical Levels

Support Resistance

1.1624     1.1657

1.1607     1.1673

1.1591     1.1690

Pivot point: 1.1640

EUR/USD– Trading Tip

The EUR/USD is trading sideways, with a wide trading range of 1.1615 to 1.1760 area as the U.S. elections keep the markets on the move. On the lower side, the bearish breakout of the 1.1615 area can extend selling until the next support area of the 1.1591 level. The release of European services PMI data may support the pair; elsewhere, the outcome of elections may drive further market movement. The MACD is entering the selling zone, but we may not see further selling until the 1.1615 level gets violated. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30635 after placing a high f 1.30787 and a low of 1.29073. The GBP/USD pair reached its five-day highest level on Tuesday amid broad-based U.S. dollar weakness during the U.S. Election Day.

The Americans were heading to the polls, and the market participants were shrugging off the risk aversion by anticipating a clear Democratic victory that would open the way for a larger fiscal stimulus package and, thus, weakened the U.S. dollar, ultimately added in the gains of GBP/USD pair.

Meanwhile, the lack of any news from the Brexit negotiations that have limited period left as the December 31 deadline was near, along with the introduction of a one-month lockdown in the U.K. to curb the traders ignored the effects of COVID-19 infections on Tuesday that could have capped further gains in the currency pair GBP/USD.

Despite there was no news related to Brexit progress from the ongoing talks between the E.U. and the U.K., the hopes for a last-minute deal helped prop up the British Pound. These hopes, combined with the U.S. dollar weakness, added additional gains in GBP/USD pair. The U.S. dollar index fell sharply to below 93.50 level, and it was down by 0.75%.

On the data front, the U.S. Factory Orders for September came in as 1.1% from the expected 1.0%, and the U.S. Wards Total Vehicle dropped to 16.2M from the anticipated 16.5 M weighed on the U.S. dollar that helped the British Pound to U.S. dollar exchange rate.

On the Brexit front, the reports indicated that talks were stuck between both parties on a level playing field and fisheries, the two main issues that stalled progress a month ago. However, other areas like social security saw progress and raised bars for a Brexit deal before the transition period. Both top negotiators Michel Barnier and David Frost will report on the progress of recent talks on Wednesday, and traders are keenly awaiting it.

The pair GBP/USD likely continue trading alongside risk-related sentiment during the upcoming sessions. As well as British Pound will not ignore any Brexit-related headlines once the picture of the U.S. election became clear.  

Daily Technical Levels

Support Resistance

1.2913     1.2941

1.2898     1.2954

1.2884     1.2969

Pivot point; 1.2926

GBP/USD– Trading Tip

Just like the EUR/USD, the GBP/USD is also trading sideways in between a narrow trading range of 1.3122 – 1.2940 area. The Cable has recently violated the downward channel, supporting the GBP/USD pair around the 1.2940 level. Above this level, the odds of buying remain strong today. On the higher side, the Sterling may find next resistance around 1.3122 while the bearish breakout of 1.2940 may lead the Cable towards the 1.2855 level. A choppy session is expected today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.497 after placing a high of 104.799 and a low of 104.431. After placing gains for three consecutive sessions, the pair reversed and posted losses on Tuesday. The U.S. dollar was under pressure on the day and was moving below 93.49 level on the back of expectations of a sweeping Democratic Party victory. The so-called blue-wave where the Joe-Biden with Democrats will take both Houses of Congress would indicate that further stimulus was on the way.

Since markets started to price in a global economic recovery, the U.S. dollar was on the back foot, a coronavirus vaccine, and ongoing fiscal and central bank stimulus in anticipation of renewed reflationary momentum.

The uncertainty over the vote’s outcome kept the safe-haven appeal in demand and continued supporting the Japanese Yen due to its safe-haven status and weighed on the USD/JPY pair. The uncertainty further escalated after Trump showed his willingness to challenge any unfavorable outcome to him legally. It came in response to the Initial polls that suggested that Biden was in the lead, and there will be a Blue/Democratic wave in the election. However, the revised readings showed that the gap between Trump and Biden was tightened.

Biden accused Trump of mishandling the COVID-19 pandemic and deserting safety precautions, including the mandated mask-use that could have saved countless lives from the crisis. Trump refuted that the American economy would be shattered under Biden, who wanted to raise most wealthy taxes.

If Biden wins the election, expectations are high that he will issue a massive stimulus package that would weigh on the U.S. dollar and ultimately drag the USD/JPY pair on the downside. Because of the stimulus package, traders started pricing it and kept selling the USD/JPY pair on Tuesday.

Meanwhile, on the data front, there was no macroeconomic release from Japan due to Bank Holiday. From the U.S., at 20:00 GMT, the Factory Orders in September elevated to 1.1% from the estimated 1.0%. The Wards Total Vehicle Sales for October weakened to 16.2 against the anticipated 16.5M and weighed on the U.S. dollar that ultimately added pressure on the USD/JPY pair on Tuesday.

Daily Technical Levels

Support Resistance

104.56     104.92

104.40     105.12

104.20     105.28

Pivot point: 104.76

USD/JPY – Trading Tips

The USD/JPY is trading choppy in between a wide trading range of 105.64 to 104.420 level. Violation of these ranges may determine the next trend in the USD/JPY pair. A bullish breakout of 105.062 level can extend the buying trend until 105.590. Conversely, the bearish breakout of 104.426 can lead the USD/JPY pair towards the 104 area. The MACD is also showing mixed bias among investors; therefore, let’s wait for a breakout before taking the next position in the USD/JPY. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 4 – Bitcoin Contesting $14,000; Crypto Sector in the Green

The cryptocurrency sector has explosively pushed towards the upside as Bitcoin is contesting the $14,000 level yet again. The largest cryptocurrency by market cap is currently trading for $13,863, representing an increase of 3.81% on the day. Meanwhile, Ethereum gained 2.93% on the day, while XRP gained 3.67%.

The cryptocurrency sector has explosively pushed towards the upside as Bitcoin is contesting the $14,000 level yet again. The largest cryptocurrency by market cap is currently trading for $13,863, representing an increase of 3.81% on the day. Meanwhile, Ethereum gained 2.93% on the day, while XRP gained 3.67%.

The cryptocurrency sector has explosively pushed towards the upside as Bitcoin is contesting the $14,000 level yet again. The largest cryptocurrency by market cap is currently trading for $13,863, representing an increase of 3.81% on the day. Meanwhile, Ethereum gained 2.93% on the day, while XRP gained 3.67%.

 Daily Crypto Sector Heat Map

The Midas Touch Gold gained 13.90% in the past 24 hours, making it the most prominent daily gainer out of the top100 cryptos ranked by market capitalization. It is closely followed by ABBC Coin’s gain of 11.68% and Ampleforth’s 9.31% gain. On the other hand, CyberVain lost 9.64%, making it the most prominent daily loser. It is followed by NEAR Protocol’s loss of 9.57% and VeChain’s loss of 8.87%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance level has increased slightly since we last reported, with its value is currently staying at 64.3%. This value represents a 0.3% difference to the upside when compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased over the course of the day. Its current value is $399.05 404.52 billion, representing a $10.79million increase when compared to our previous report.

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What happened in the past 24 hours?

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_______________________________________________________________________

Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization had a great day as its price moved above the $13,900 mark. While the move got stopped out near $14,000, its price is still above the level it just passed.

Due to no strong pullbacks happening at the moment and Bitcoin staying within a very narrow range ($13,000-$14,100), we can expect a strong move to either side very soon. Traders should pay attention to any attempt to break its support/resistance levels Bitcoin makes.

BTC/USD 4-hour Chart

Bitcoin’s technicals on all time-frames are bullish, with the weekly overview being the only one with a considerable amount of neutrality.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is above both its 50-period EMA and its 21-period EMA
  • Price above its middle Bollinger band
  • RSI is neutral (58.89)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $13,900                                 1: $13,570

2: $14,000                                 2: $13,180

3: $14,100                                  3: $13,000

Ethereum

Ethereum has bounced off of its $371 support level and started moving back towards its ascending channel. However, the channel bottom line was too strong to pass, and Ethereum ended up consolidating slightly below it. As time passes, the possibility of Ethereum breaking the level will be diminished due to the constant increase in the line’s price position.

Ethereum is now trading in a range between $378 and the ascending channel bottom line, which can be taken advantage of. However, Bitcoin is preparing a move, and Ethereum will most likely respond to it by following its direction and intensity, which can be used by the traders.

ETH/USD 4-hour Chart

Ethereum’s short-term technicals are unclear (4-hour overview being slightly bearish while daily overview is slightly bullish), while its longer-term technicals are heavily tilted towards the buy-side.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is below its 50-period and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (49.02)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $400                                     1: $378

2: $415                                     2: $371

3: $420                                      3: $361

Ripple

The fourth-largest cryptocurrency by market cap took the day to push back above $0.235 and consolidate above it. This returned XRP back within a range bound by $0.235 to the downside and $0.2454 to the upside.

As we mentioned in our previous articles, if the next Bitcoin’s explosive move does not fuel XRP, traders can comfortably trade sideways action within this range. If, however, Bitcoin’s price moves to either side and XRP follows the direction, traders can use this event to trade alongside the direction XRP is moving in.

XRP/USD 4-hour Chart

XRP’s technicals on all time-frames are heavily tilted towards the sell-side. However, the longer the time-frame, the more neutral the technicals are, with the monthly indicator being very close to being completely neutral.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price below its 50-period EMA and above its 21-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is close to the oversold territory (50.52)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $0.2454                                 1: $0.235

2: $0.26                                     2: $0.227

3: $0.266                                  3: $0.221

 

Categories
Forex Signals

AUD/USD Reverse Overnight Bearish Moves – Eyes on 0.7206 Resistance! 

The AUD/USD currency pair succeeded to stop its overnight declining streak and drew some modest bids around above mid-0.7000 level mainly due to the risk-on market sentiment, which tends to underpin the perceived risk currency Australian dollar and contributes to the currency pair gains. Hence, the market trading sentiment was being supported by upbeat activity data from the U.S., China, and Europe, which rekindled economic recovery hopes and underpinned the market risk-tone. 

The AUD/USD currency pair succeeded to stop its overnight declining streak and drew some modest bids around above mid-0.7000 level mainly due to the risk-on market sentiment, which tends to underpin the perceived risk currency Australian dollar and contributes to the currency pair gains. Hence, the market trading sentiment was being supported by upbeat activity data from the U.S., China, and Europe, which rekindled economic recovery hopes and underpinned the market risk-tone. 

The AUD/USD currency pair succeeded to stop its overnight declining streak and drew some modest bids around above mid-0.7000 level mainly due to the risk-on market sentiment, which tends to underpin the perceived risk currency Australian dollar and contributes to the currency pair gains. Hence, the market trading sentiment was being supported by upbeat activity data from the U.S., China, and Europe, which rekindled economic recovery hopes and underpinned the market risk-tone. 

Apart from this, the market trading sentiment was further bolstered by the updates suggesting continuous progress of Brexit talks between the U.K. and the European Union (E.U.), which extended further support to the currency pair. Across the pond, the broad-based U.S. dollar selling bias, triggered by the marker risk-on sentiment, also played its major role in supporting the currency pair. Moreover, the losses in the U.S. dollar was further bolstered by the intensifying doubts over the U.S. economic recovery ahead of the U.S. presidential elections. 

On the contrary, the long-lasting coronavirus woes globally, as well as delays in the U.S. covid stimulus, keep challenging the upbeat market sentiment, which becomes the key factor that kept the lid on any additional gains in the currency pair. In the meantime, the gains in the currency pair were further capped by the reports suggesting that the RBA is expected to cut the benchmark rate and announce more Q.E. At this time, the AUD/USD currency pair is currently trading at 0.7057 and consolidating in the range between 0.7044 – 0.7063.

Despite the concern about the second wave of coronavirus infections, which leads the lockdown measures, the market trading sentiment remained positive during the early Asian session amid positive developments surrounding the Brexit talks between the U.K. and the European Union (E.U.), which in turn, underpinned the perceived risk currency Australian dollar and contributed to the currency pair gains. 

Across the ocean, bullish sentiment around the equity market was further bolstered by the upbeat activity numbers from the U.S., China, and Europe, which rekindled economic recovery hopes and underpinned the market trading sentiment. As per the latest report, the ISM manufacturing index jumped to the highest in more than two years.

As in result, the S&P 500 futures succeeded to extend its overnight positive momentum and remain bullish on the day, which tends to undermine the demand for the safe-haven U.S. dollar and extended support to the currency pair. Despite the upbeat U.S. data, the broad-based U.S. dollar failed to erase its overnight losses and remained under pressure on the day mainly due to the marker risk-on tone. Apart from this, the resurgence of coronavirus keeps fueling the fears that the U.S. economic recovery could be halt, which also keeps the greenback under pressure. However, the losses in the U.S. dollar could be considered as the major factor that kept the currency pair higher. Meanwhile, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped to 93.977.

On the contrary, the intensifying coronavirus woes across the globe, as well as, intensifying lockdowns restrictions in Europe keep challenging the upbeat market sentiment and become the key factor that kept the lid on any additional gains in the currency pair. As per the latest report, Europe declared this weekend second lockdowns amid surging coronavirus cases. It is worth recalling that the market and industry professionals were not expecting renewed lockdowns for whole countries. Late last week, Austria announced a second lockdown until the end of November, including closing hotels for tourism, as well as restaurants except for takeaway and delivery. Apart from froths, the U.K., one of the largest economies in Europe, is also imposing lockdown restrictions while Belgium also returned to a nationwide lockdown. 

Elsewhere, the growing probabilities that the RBA will cut interest rates in November could also be considered as one of the key factors that kept the lid on any additional gains in the currency pair. It is worth recalling that the benchmark interest rate likely cut to 0.10% from 0.25%. 

In the absence of the major data/events on the day, the market traders will keep their eyes on the monetary policy meeting of the RBA and the U.S. presidential election for fresh directions. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch.


Daily Support and Resistance

S1 0.69

S2 0.6966

S3 0.7008

Pivot Point 0.7033

R1 0.7075

R2 0.71

R3 0.7166

The AUD/USD has traded sharply bullish amid weaker U.S. dollar, as the pair crossed over 0.7150 level. On the higher side, the AUD/USD pair may head further higher until the next resistance area of 0.7199 level. The MACD and RSI are extremely overbought, and however, we have to wait for bearish reversal candles ahead of opening a sell trade in Aussie. On the lower side, the Aussie can find support at 0.7150 and 0.7105 mark. Let’s wait for the U.S. elections before opening any further trades today. Good luck!  

Categories
Forex Videos

Halloween Forex Week – Don’t Trade Until You’ve Seen This!

https://youtu.be/8nwBFUoFQiM

https://youtu.be/8nwBFUoFQiM

Halloween for forex traders – the scariest event on the calendar for a long time!

Trading in the financial markets is inherently risky. And professional traders will try and mitigate risk by using an economic calendar to either deliberately trade risky events such as interest rate decisions by central governments or gross domestic product announcements, etc. or to avoid them at all costs.
But now and then, risk events come along that truly worry professional traders and investors. The financial week commencing the 2nd of November 2020 has the potential to cause a tsunami of price action movements in financial assets, including currencies, stocks, and bonds, metals, cryptocurrencies, oil, and commodities. Essentially, everything that can be traded will undoubtedly see volatility during this week.

So why should traders be worried about this week?

The financial markets are in a state of flux with large investors and institutions looking to mitigates risky forthcoming events. This means juggling their portfolios in order to diversify against the risk of a huge stock market falls, especially in the United States should Joe Biden become the next president. This is due to fears that he will have a negative impact on the markets with regard to democrats’ policies, including higher taxation and increased regulations for businesses across the USA.

We have already seen increased volatility in the financial markets, especially with currencies where the US dollar has broadly strengthened against other currencies, especially the major currency pairs. While some of this may be attributed to the month-end readjustment by financial institutions and upcoming planning for year-end rebalancing, the bulk of this activity is due to the forthcoming and tightly contested key economic calendar event for this year, which is the US presidential elections on the 3rd of November.

This just happened to coincide with the Japanese monetary policy meeting minutes being released on Tuesday, as well as the Reserve Bank of Australia releasing its interest rate decision. While the election winner will not be announced on the same day, markets will be braced for when the announcement eventually does come. The completely different styles of presidency being offered by both parties are said to have positive and negative impacts for stock markets, with President Trump’s policies of low taxation and low corporate red tape seen as positive for the economy and where Biden’s policies are the opposite and thus create a negative sentiment for the economy.
This event, which is dynamic and has the potential to cause huge market swings on its own, but it happens to coincide with an increase in the Coved transmissions globally, and where a second wave of the pandemic is sweeping across Europe and the United States, where last week 70,000 cases of the infection were reported in a single day.

It also coincides with the United Kingdom, Germany, and France initiating lockdowns for their peoples to try and contain the virus. As if that wasn’t enough to contend with, financial traders have to keep an eye on the Brexit future trade deal negotiations, which are a critical junction, with just a few days remaining to allow the United Kingdom and European Union to agree on a tariff-free future trade deal. If they are unable to do so, the United Kingdom will exit the transition period at the end of December without a formal trade deal with its European friends, and this, coupled with the economic situation unfolding due to the coronavirus, will be seen as a boot on the throat of the ailing British economy, which is struggling because of the ongoing Covid crisis.

And if you have been looking at your economic calendar for the forthcoming week, the sea of red, in terms of high impact events, continues on Thursday with the Bank of England interest rates decision and the United States federal Bank interest rate decision also compounding nervousness for the jittery markets.
And as if it needed a cherry on the top, on Friday, the US non-farm payrolls for October numbers are released. Historically a huge market-moving event could cause spikes as volumes lessen due to risk and where this would impact liquidity, causing wide spreads.
The best thing is to trade with tight stops, expect the unexpected, and even better still, sit back if you don’t need to trade and watch this incredible week unfold.

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 3 – Crypto Sector in the Red; Altcoins Plummeting

The cryptocurrency sector experienced an overall price drop as Bitcoin pushed down towards sub-$13,500 levels. Most cryptocurrencies ended in the red as they lost quite a bit more than Bitcoin itself. The largest cryptocurrency by market cap is currently trading for $13,411, representing a decrease of 1.88% on the day. Meanwhile, Ethereum lost 5.68% on the day, while XRP lost 3.96%.

The cryptocurrency sector experienced an overall price drop as Bitcoin pushed down towards sub-$13,500 levels. Most cryptocurrencies ended in the red as they lost quite a bit more than Bitcoin itself. The largest cryptocurrency by market cap is currently trading for $13,411, representing a decrease of 1.88% on the day. Meanwhile, Ethereum lost 5.68% on the day, while XRP lost 3.96%.

The cryptocurrency sector experienced an overall price drop as Bitcoin pushed down towards sub-$13,500 levels. Most cryptocurrencies ended in the red as they lost quite a bit more than Bitcoin itself. The largest cryptocurrency by market cap is currently trading for $13,411, representing a decrease of 1.88% on the day. Meanwhile, Ethereum lost 5.68% on the day, while XRP lost 3.96%.

 Daily Crypto Sector Heat Map

The Midas Touch Gold gained 8.44% in the past 24 hours, making it the cryptocurrency to gain the most in a day (out of the top100 cryptos by market capitalization). The rest of the cryptocurrencies experienced close to no gains. On the other hand, Reserve Rights lost 17.14%, making it the most prominent daily loser. It is followed by SushiSwap’s loss of 14.07% and Compound’s loss of 12.86%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance level has increased since we last reported, with its value is currently staying at 64%. This value represents a 0.9% difference to the upside when 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 $388.84 404.52 billion, representing a $5.32 million decrease when compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap has (as said in our previous article) moved away from the sideways trading as it could not stand trading in such a narrow range. Bitcoin pulled back below $13,570 and even went as low as ~13,200 before bouncing back to ~$13,400 (where it is currently consolidating).

The recent days have brought us a lot of support/resistance hopping, which is what we may expect in the near future as well. Traders should focus on capitalizing on these movements as they almost always overextend. The trades can be made both while Bitcoin is creating overextension (riskier but a bigger profit potential) or during the pullback (safer but less profit potential).

BTC/USD 4-hour Chart

Bitcoin’s 4-hour technicals are showing a bear tilt, while its longer time-frames are tilted towards the buy-side (longer time-frames have less neutrality and more of a buy-tilt than the shorter ones).

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is far at its 50-period EMA and below its 21-period EMA
  • Price below its middle Bollinger band
  • RSI is neutral (43.90)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $13,570                                 1: $13,180

2: $13,900                                 2: $13,000

3: $14,000                                  3: $12,870

Ethereum

Ethereum has plummeted after failing to break the $400 mark, and losing all the most recent gains in the process. The second-largest cryptocurrency by market cap has left the ascending channel since the end of September. Its price drop was stopped at the $371 resistance level, which has held up quite well.

Ethereum is now trading in a narrow range bound by $371 to the downside and $378 to the upside. Traders should look for any breakouts to enter trades, while the ones that want to trade the sideways action should wait and see if Ethereum is likely to stay within this range.

ETH/USD 4-hour Chart

Ethereum’s 4-hour and daily technicals are tilted towards the sell-side, while its weekly and monthly overviews remain bullish.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is far below both its 50-period and its 21-period EMA
  • Price is at its bottom Bollinger band
  • RSI is close to being overbought (35.83)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $378                                     1: $371

2: $400                                     2: $361

3: $415                                      3: $358

Ripple

The fourth-largest cryptocurrency by market cap has had a red day as well, with its price falling through major support levels. A failed attempt to break the $0.2454 level has triggered a pullback, which pushed XRP’s price below $0.235 and even attempted to break $0.227. However, this support level held up, and XRP is now trading slightly above it.

If not fueled by Bitcoin’s explosive move towards either side, XRP will most likely trade sideways between $0.227 and $0.235. While traders could trade the sideways action without much problem, the lack of intra-range volatility is low, which brings the profit potential way down.

XRP/USD 4-hour Chart

XRP’s daily, weekly, and monthly technicals are all showing a strong tilt towards the sell-side, while its 4-hour overview is slightly bullish with hints of neutrality.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price far below both its 50-period EMA and its 21-period EMA
  • Price is at its bottom Bollinger band
  • RSI is close to the oversold territory (31.89)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $0.235                                   1: $0.227

2: $0.2454                                 2: $0.221

3: $0.26                                    3: $0.217

 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 03 – Top Trade Setups In Forex – U.S. Presidential Election in Highlights!

On the news front, eyes will remain on the U.S. Presidential Election. The voters will elect the 46th President of the United States. The winner will likely be projected before the official vote count is announced, based on early vote counts and exit polling. Besides, the U.S. Factory Orders m/m are also due, but their impact is likely to be overshadowed by the U.S. elections. 

On the news front, eyes will remain on the U.S. Presidential Election. The voters will elect the 46th President of the United States. The winner will likely be projected before the official vote count is announced, based on early vote counts and exit polling. Besides, the U.S. Factory Orders m/m are also due, but their impact is likely to be overshadowed by the U.S. elections. 

On the news front, eyes will remain on the U.S. Presidential Election. The voters will elect the 46th President of the United States. The winner will likely be projected before the official vote count is announced, based on early vote counts and exit polling. Besides, the U.S. Factory Orders m/m are also due, but their impact is likely to be overshadowed by the U.S. elections. 

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.16399 after placing a high of 1.16554 and a low of 1.16218. EUR/USD pair extended its losses and dropped for the 6th consecutive session on Monday amid the rising safe-haven appeal and coronavirus situation in Europe. The EUR/USD pair ended its day with modest losses as the currency pair’s bearish momentum was somehow cooled down because of the positive PMI data from European nations. Meanwhile, the U.S. dollar was also strong onboard due to its safe-haven status as well as due to the strong macroeconomic data on Monday.

At 13:15 GMT, the Spanish Manufacturing PMI for October raised to 52.5 against the expected 51.0 and supported the single currency Euro. At 13:45 GMT, the Italian Manufacturing PMI for October remained flat with a forecast of 53.9. At 13:50 GMT, the French Final Manufacturing PMI for October also came in as expected 51.3. At 13:55 GMT, the German Final Manufacturing PMI came in line with the anticipations of 58.0. At 14:00 GMT, the Final Manufacturing PMI for the whole bloc in October raised to 54.8 from the expected 54.4 and supported the single currency Euro.

Europe’s positive PMI data gave some support to Euro that ultimately capped further losses in EUR/USD pair.

From the U.S. side, at 19:45 GMT, the Final Manufacturing PMI for October remained flat at 53.4. At 20:00 GMT, the ISM Manufacturing PMI for October rushed to 59.3 from the estimated 55.6 and supported the U.S. dollar. The Construction Spending for September fell to 0.3% from the projected 1.0% and weighed on the U.S. dollar. The ISM Manufacturing Prices for October also elevated to 65.6 against the anticipated 60.5 and supported the U.S. dollar.

On Monday, the positive data from the U.S. made the U.S. dollar even stronger and supported the downside movement of the EUR/USD pair.

Furthermore, the U.S. dollar was set to lose its bullishness in the days ahead as markets were keenly waiting for the U.S. presidential elections’ results. Although the uncertainty persists in the market regarding the election’s outcome, this is the critical time to enter or place any position in the market. This is the reason behind the consolidated movement of the EUR/USD pair on Monday.

Furthermore, both the U.S. election candidates, Biden and Trump, have said that they would deliver a big stimulus package after the election. So, it means the next round of stimulus packages will be delivered regardless of the winner. These hopes kept weighing in the U.S. dollar and capped further losses in EUR/USD pair.

On the other hand, the renewed lockdown restrictions in France, Germany, Italy, and Belgian to curb the effect of coronavirus pandemic raised the concerns for Eurozone economic recovery and kept weighing on single currency that kept the EUR/USD pair on the downside.

Daily Technical Levels

Support Resistance

1.1637     1.1651

1.1631     1.1659

1.1623     1.1665

Pivot point: 1.1645

EUR/USD– Trading Tip

The EUR/USD traded with a bearish bias, having dropped below the support area of 1.1653. At the moment, the EUR/USD is likely to face the resistance at the same level of 1.1653. On the higher side, a bullish crossover of 1.1653 increases the odds of continuing an upward trend, and it may lead the EUR/USD price towards 1.1700. Further bullish crossover of this area can lead the pair towards the 1.1758 level. Conversely, a bearish crossover of 1.1653 support level has opened additional room for selling until the 1.1613 area as a double bottom support area extends the level.  

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29180 after placing a high of 1.29426 and a low of 1.28539. The British Pound started to decline against the U.S. dollar at the starting day of the week as the hopes raised for further monetary easing by the Bank of England this week following the second lockdown in England.

Over the weekend, the U.K. announced that it would enter a second national lockdown for a month to control the rise in coronavirus infections. On Monday, the coronavirus cases fell to 18,950 in comparison to 10,900 cases a week ago. The expectations for further easing came on board after the Britain government made this announcement on the weekend.

The new lockdown measures in the U.K. demand the people stay at home unless there is an essential purpose like education, medical reason, or shopping for groceries. However, economists have warned that country would enter a double-dip recession if it enters another lockdown as it will dent the economic growth in the final quarter of the year. These concerns kept the risk sentiment under pressure and weighed on British Pound that ultimately added the GBP/USD pair’s losses.

On the data front, at14:30 GMT, the Final Manufacturing PMI from Great Britain was raised to 53.7against the expected 53.3 and supported British Pound and capped further losses in GBP/USD pair. From the U.S. side, at 19:45 GMT, the Final Manufacturing PMI for October came in line with the anticipations of 53.4. At 20:00 GMT, the ISM Manufacturing PMI for October raised to 59.3 from the forecasted 55.6 and supported the U.S. dollar. The Construction Spending for September plunged to 0.3% from the forecasted 1.0% and weighed on the U.S. dollar. The ISM Manufacturing Prices for October also rose to 65.6 against the estimated 60.5 and supported the U.S. dollar.

The positive PMI data from the U.S. gave strength to the U.S. dollar and added further pressure on GBP/USD pair. On the Central Bank front, the BOE will have its monetary policy meeting on Thursday, and the hopes are that it will refrain from announcing negative rates, and the bank could also introduce another easing for supporting the economy.

On the Brexit front, the Brexit-talks continue in Brussels as the U.K. and the E.U. were working to avoid a no-deal Brexit. However, no fresh headlines were seen regarding this matter on Monday that kept the currency pair under the mercy of a strong U.S. dollar across the board.

Daily Technical Levels

Support Resistance

1.2913     1.2941

1.2898     1.2954

1.2884     1.2969

Pivot point; 1.2926

GBP/USD– Trading Tip

The GBP/USD is trading sharply bearish to trade over the double bottom support area of 1.2910 level. On the 2 hour timeframe, the GBP/USD pair has formed a downward channel, and bearish trend continuation can lead the pair further lower towards the next support area of 1.2830 level. However, to see that kind of selling, the Cable needs to violate the immediate support area of 1.2910. The MACD and 50 EMA support selling; therefore, we should look for a selling trade below the 1.2910 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.749 after placing a high of 104.947 and a low of 104.514. The USD/JPY pair rose and posted gains for the third consecutive session on Monday amid the broad-based U.S. dollar strength. The U.S. dollar pushed higher in the early European session on Monday as European nations imposed more lockdowns on the back of an incessant rise in coronavirus cases. The uncertainty surrounding the upcoming U.S. elections also weighed on market sentiment and kept the USD/JPY pair higher.

The U.K. joined Germany and France over the weekend and re-introduced partial lockdowns to curb the coronavirus’s spread. Europe crossed the 10 million total cases of coronavirus infections and supported the safe-haven appeal that added further strength to the U.S. dollar.

The Bank of England will hold its monetary policy meeting on Thursday, and investors believe that the bank will increase the asset purchases by 150-200 billion British Pounds. These hopes forced the investors to stick with the U.S. currency in these uncertain times, but the ranges were tight as the markets were under pressure ahead of Tuesday’s U.S. presidential election.

The U.S. dollar was also strong because of the rising hopes for the victory of Joe Biden in the upcoming election as he has maintained a healthy lead over his competitor Donald Trump in national polls over the weekend before elections. Furthermore, some of the gains in the USD/JPY pair were lost in the late trading session as the traders were also waiting for the upcoming Federal Reserve monetary policy meeting on Thursday.

On the data front, at 05:30 GMT, the Final Manufacturing PMI from Japan for October raised to 48.7 from the forecasted 48.0 and supported the Japanese Yen that capped further upside in USD/JPY pair. From the U.S. side, at 19:45 GMT, the Final Manufacturing PMI from the U.S. for October remained flat at 53.4. At 20:00 GMT, the ISM Manufacturing PMI from the U.S. advanced to 59.3 from the estimated 55.6 in October and supported the U.S. dollar. The Construction Spending for September fell to 0.3% from the predicted 1.0% and weighed on the U.S. dollar. The ISM Manufacturing Prices for October also raised to 65.6 against the projected 60.5 and supported the U.S. dollar. The U.S. dollar was further supported by the positive results from the macroeconomic data, and it helped the USD/JPY pair to post gains on Monday.

Daily Technical Levels

Support Resistance

104.51     104.66

104.45     104.75

104.35     104.81

Pivot point: 104.60

USD/JPY – Trading Tips

The USD/JPY is trading slightly bullish at the 104.745 level, having crossed over the immediate resistance area of the 104.600 mark. On the 2 hour timeframe, the USD/JPY has violated the downward trendline at 104.550 level, and now the same level is likely to support the USD/JPY pair. The closing of candles over 104.650 level is supporting strong odds of bullish trend continuation until 105.049 level. Further bullish trend continuation can also lead the USD/JPY pair towards the 105.800 level. Good luck! 

Categories
Forex Signals

USD/CHF Set for Bearish Correction – U.S. Elections in Play!  

During Tuesday’s Early Asian trading session, the USD/CHF extended its overnight losses and remain depressed around just above the 0.9167 support level mainly due to the broad-based U.S. dollar weakness. However, the prevalent downtrend in the greenback is mainly tied to the upbeat activity numbers from the U.S., China, and Europe, which rekindled economic recovery hopes and kept market trading sentiment positive. Moreover, the political uncertainty in the U.S. also weighs on the already weaker U.S. dollar, which adds further burden around the currency pair.

During Tuesday’s Early Asian trading session, the USD/CHF extended its overnight losses and remain depressed around just above the 0.9167 support level mainly due to the broad-based U.S. dollar weakness. However, the prevalent downtrend in the greenback is mainly tied to the upbeat activity numbers from the U.S., China, and Europe, which rekindled economic recovery hopes and kept market trading sentiment positive. Moreover, the political uncertainty in the U.S. also weighs on the already weaker U.S. dollar, which adds further burden around the currency pair.

During Tuesday’s Early Asian trading session, the USD/CHF extended its overnight losses and remain depressed around just above the 0.9167 support level mainly due to the broad-based U.S. dollar weakness. However, the prevalent downtrend in the greenback is mainly tied to the upbeat activity numbers from the U.S., China, and Europe, which rekindled economic recovery hopes and kept market trading sentiment positive. Moreover, the political uncertainty in the U.S. also weighs on the already weaker U.S. dollar, which adds further burden around the currency pair.

Despite the intensified Sino-US tussle and coronavirus (COVID-19) woes, the market trading sentiment managed to stop its previous negative performance and started to gain some positive traction during the early Asian session on the day perhaps due to the upbeat activity numbers from the U.S., China, and Europe, which rekindled economic recovery hopes. Moreover, the market trading sentiment got an additional lift from the positive developments surrounding the Brexit talks between the U.K. and the European Union (E.U.), which in turn, provided an instant boost to the market trading sentiment and undermined the safe-haven assets including the safe-haven U.S. dollar.

Despite the upbeat U.S. data, the broad-based U.S. dollar remained depressed as the investors continue to sell U.S. dollars on the back of the upbeat market sentiment. Moreover, the losses in the U.S. dollar could also be associated with political uncertainty in the U.S. ahead of U.S. elections. However, the losses in the U.S. dollar could be considered as the major factor that kept the currency pair under pressure. Meanwhile, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped to 93.977 to 93.705.


Technically, the USD/CHF pair has entered the overbought zone at the 0.9204 level and below this, the market has initiated the retracement/correction in the USD/CHF pair. Therefore, we have opened a sell trade below 0.9200 area to target quick 40 pips—checkout out a trading plan below. 

Entry Price – Sell 0.91809

Stop Loss – 0.92209

Take Profit – 0.91409

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

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Forex Market Analysis Forex Videos

Forex – New Zealand Dollar Set To Remain Powerful! How to Trade The Coming Weeks…

https://youtu.be/7UZgtNtLTgU

https://youtu.be/7UZgtNtLTgU

 

Is the New Zealand dollar bucking the trend?

Thank you for joining this forex academy educational video. In this session, we will be taking a look at some technical analysis for the New Zealand dollar.

As many countries in the western world are still in the grip of the Coronavirus pandemic, and with many western countries now seeing a second wave, New Zealand has managed to maintain a low infection rate.
The New Zealand dollar, also known as the kiwi, is a major currency and one of the top currencies traded against the United States dollar.

Other major currencies have seen huge swings against the United States dollar and other currencies. The kiwi has remained one of the best performers.

In this yearly chart, if we go back to the beginning of the year, we can see that the pair topped out around 0.6700 before being sold off heavily in the middle of march, and this was largely attributed to the United States dollar being bought as a safe-haven currency and before the pandemic really began to take hold in the US.

Since then, the New Zealand dollar has climbed up to record highs for the year to a peak in September at 0.6765, and although it is off of that high, a clearly defined line of support can be seen on the chart, and where this support line is moving higher, potentially offering a squeeze back to the resistance line and possibly beyond.
At the time of writing, the exchange rate was 0.6610, and with a high of 0.6765, it represents a fall from the high of only 155 pips.

If we now take a look at the EURUSD pair, we can see that while the NZDUSD pair was peaking at its high, the EURUSD pair was also peaking at a defined area of resistance at 1.1940. It subsequently pulled back to its current low of 1.1647, which may become an official support line if it moves higher, and where this move is -293 pips or almost twice the fall in pip value of the NZDUSD pair. This is another indication that traders believe the kiwi is worth buying.
This was further helped this week by the reserve bank of New Zealand, which stated that it would begin to cut back on its government bond purchases and that the economic activity was rising while the coronavirus was under control.
Safe-haven currencies saw some buying with continual downward pressure on the USDJPY pair last week, which tried to hit the key 104.00 level, and the US dollar also becoming a safe-haven currency, moving to fresh highs of above 94.00 on the DXY index, and yet again this did not cause a huge sell-off in the New Zealand dollar, as it held to the support line.

The week ahead is a monumental one with potentially a change in leadership for the US presidential office, and it is extremely difficult to predict where things might go from here. However, once the dust has settled, the economic indicators favor the New Zealand dollar, and we believe this will become a bid currency.

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Forex Market Analysis Forex Videos

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

https://youtu.be/MU6C9-G7SLc

https://youtu.be/MU6C9-G7SLc

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

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

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

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

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

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

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

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

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

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Forex Signals

EUR/USD Regression Channel Continues to Drive Selling – Update on Signal! 

The EUR/USD pair was closed at 1.16445 after placing a high of 1.17041 and a low of 1.16398. The EUR/USD pair extended its losses for the 5th consecutive day on Friday and remained bearish throughout the day. The main driver behind the steepest fall in Euro currency this week was the market concerns about the rising number of coronavirus infections in Europe and the effects of the social distancing measures to curb them. 

The EUR/USD pair was closed at 1.16445 after placing a high of 1.17041 and a low of 1.16398. The EUR/USD pair extended its losses for the 5th consecutive day on Friday and remained bearish throughout the day. The main driver behind the steepest fall in Euro currency this week was the market concerns about the rising number of coronavirus infections in Europe and the effects of the social distancing measures to curb them. 

The EUR/USD pair was closed at 1.16445 after placing a high of 1.17041 and a low of 1.16398. The EUR/USD pair extended its losses for the 5th consecutive day on Friday and remained bearish throughout the day. The main driver behind the steepest fall in Euro currency this week was the market concerns about the rising number of coronavirus infections in Europe and the effects of the social distancing measures to curb them. 

The latest lockdown restrictions introduced by France and Germany and the tighter restrictions applied in Italy and Spain raised alarms about their impact on the fragile economic recovery and weighed on the single currency Euro that ultimately added pressure on EUR/USD pair. 

Furthermore, the European Central Bank hinted to unleash new stimulus measures in December to counteract the pandemic’s negative impact and weighed on the Euro currency that added further losses in EUR/USD pair on Friday.

Meanwhile, on the data front, at 11:30 GMT, the French Consumer Spending for September was dropped to -5.1% against the expected -1.5% and weighed on Euro. The French Flash GDP for the quarter raised to 18.2% against the expected 15.0% and supported Euro. At 12:00 GMT, German Retail Sales for September dropped to -2.2% from the forecasted -0.6% and weighed on Euro. At 12:45 GMT, the French Prelim CPI for October fell to -0.1% against the forecasted 0.0% and weighed on Euro. At 13:00 GMT, the Spanish Flash GDP for the quarter surged to 16.7% after placing a high of 13.5% and supported Euro. 

The Italian Monthly Unemployment Rate declined to 9.6% from the forecasted 10.1% and weighed on Euro. At 14:00 GMT, German Prelim GDP for the quarter raised to 8.2% from the forecasted 7.3% and supported Euro. The Italian Prelim GDP for the quarter also raised to 16.1% from the forecasted 11.1% and supported Euro. At 14:58 GMT, the Italian Prelim CPI for October remained flat with the expectations of 0.2%.

Support Resistance

1.1798 1.1789

1.1672 1.1834

1.1626 1.1870

Pivot point: 1.1753


The EUR/USD traded with a bearish bias, having dropped below the support area of 1.1653. At the moment, the EUR/USD is likely to face the resistance at the same level of 1.1653. On the higher side, a bullish crossover of 1.1653 increases the odds of continuing an upward trend, and it may lead the EUR/USD price towards 1.1700. Further bullish crossover of this area can lead the pair towards the 1.1758 level. Conversely, a bearish crossover of 1.1653 support level has opened additional room for selling until the 1.1613 area as a double bottom support area extends the level.  

Entry Price – Buy 1.1646

Stop Loss – 1.1686

Take Profit – 1.1606

Risk to Reward – 1:1.25

Profit & Loss Per Standard Lot = -$400/ +$500

Profit & Loss Per Micro Lot = -$40/ +$50

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

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Forex Market Analysis

Daily F.X. Analysis, November 02 – Top Trade Setups In Forex – Series of Manufacturing PMI Ahead! 

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 the lift of lockdown. Price action will depend upon any surprise changes in the PMI figures.

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 the lift of lockdown. Price action will depend upon any surprise changes in the PMI figures.

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 the 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 was closed at 1.16445 after placing a high of 1.17041 and a low of 1.16398. The EUR/USD pair extended its losses for the 5th consecutive day on Friday and remained bearish throughout the day.

The main driver behind the steepest fall in Euro currency this week was the market concerns about the rising number of coronavirus infections in Europe and the effects of the social distancing measures to curb them. 

The latest lockdown restrictions introduced by France and Germany and the tighter restrictions applied in Italy and Spain raised alarms about their impact on the fragile economic recovery and weighed on the single currency Euro that ultimately added pressure on EUR/USD pair. Furthermore, the European Central Bank hinted to unleash new stimulus measures in December to counteract the pandemic’s negative impact and weighed on the Euro currency that added further losses in EUR/USD pair on Friday.

Meanwhile, on the data front, at 11:30 GMT, the French Consumer Spending for September was dropped to -5.1% against the expected -1.5% and weighed on Euro. The French Flash GDP for the quarter raised to 18.2% against the expected 15.0% and supported Euro. At 12:00 GMT, German Retail Sales for September dropped to -2.2% from the forecasted -0.6% and weighed on Euro. At 12:45 GMT, the French Prelim CPI for October fell to -0.1% against the forecasted 0.0% and weighed on Euro.

At 13:00 GMT, the Spanish Flash GDP for the quarter surged to 16.7% after placing a high of 13.5% and supported Euro. The Italian Monthly Unemployment Rate declined to 9.6% from the forecasted 10.1% and weighed on Euro. At 14:00 GMT, German Prelim GDP for the quarter raised to 8.2% from the forecasted 7.3% and supported Euro. The Italian Prelim GDP for the quarter also raised to 16.1% from the forecasted 11.1% and supported Euro. At 14:58 GMT, the Italian Prelim CPI for October remained flat with the expectations of 0.2%.

At 15:00 GMT, the CPI Flash Estimate for the year remained flat at -0.3%. The Core CPI Flash Estimate for the year also came in line as expected, 0.2%. The Prelim Flash GDP for the quarter raised to 12.7% from the forecasted 9.5% and supported Euro. The Unemployment Rate from the whole bloc raised to 8.3% from the forecasted 8.2% and weighed on Euro.

After the release of economic data, the single currency Euro came under fresh pressure amid the rising fears of investors’ that strong quarterly economic growth in Germany, which raised to 8.2% in the third quarter, will be temporary as the virus spread in the region has picked up the pace. This added further pressure on EUR/USD pair on Friday.

From the U.S. side, at 17:30 GMT, the Core PCE Price Index for September came in line with the anticipations of 0.2%. The Personal Spending for September rose to 1.4% against the projected 1.0% and supported the U.S. dollar and added pressure on EUR/USD pair. The Employment Cost Index for the quarter came in line with the expectations of 0.5%. The Personal Income for September also surged to 0.9% from the estimated 0.3% and supported the U.S. dollar and add losses in EUR/USD pair.

 At 18:45 GMT, the Chicago PMI for October upraised to 61.1 against the predictable 58.2 and supported the U.S. dollar. At 19:00 GMT, the Revised UoM Consumer Sentiment for October also elevated to 81.8 against the estimated 81.2 and supported the U.S. dollar that supported the losses on EUR/USD pair on Friday. The Revised UoM Inflation Expectations for October were reported as 2.6% compared to September’s 2.7%.

Daily Technical Levels

Support Resistance

1.1798     1.1789

1.1672     1.1834

1.1626     1.1870

Pivot point: 1.1753

EUR/USD– Trading Tip

The EUR/USD traded with a bearish bias, having dropped below the support area of 1.1653. At the moment, the EUR/USD is likely to face the resistance at the same level of 1.1653. On the higher side, a bullish crossover of 1.1653 increases the odds of continuing an upward trend, and it may lead the EUR/USD price towards 1.1700. Further bullish crossover of this area can lead the pair towards the 1.1758 level. Conversely, a bearish crossover of 1.1653 support level has opened additional room for selling until the 1.1613 area as a double bottom support area extends the level.  

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29464 after placing a high of 1.29879 and a low of 1.28989. After placing losses for two consecutive days, the GBP/USD pair raised on Friday and posted gains. The GBP/USD pair rose on Friday despite the strength of the U.S. dollar, improved risk-averse market sentiment, and the rising number of coronavirus cases in Great Britain. The rising number of coronavirus cases in the U.K. showed that the imposed restrictions might be insufficient, and the country should follow the steps of Europe and France.

On the U.S. Presidential election front, the polls after the presidential debate showed that former vice president Joe Biden was leading over President Donald Trump. The chances for a blue wave in the U.S. gave pressure on local currency and supported the gains of the GBP/USD pair on Friday. On the data front, at 11:52 GMT, the Nationwide House Price Index for October raised to 0.8% from the forecasted 0.4% and supported British Pound that added further gains in GBP/USD pair.

From the U.S. side, at 17:30 GMT, the Core PCE Price Index for September came as anticipated by 0.2%. The Personal Spending for September surged to 1.4% against the anticipated 1.0% and supported the U.S. dollar. The Employment Cost Index for the quarter came as expected of 0.5%. The Personal Income for September also raised to 0.9% from the projected 0.3% and supported the U.S. dollar.

At 18:45 GMT, the Chicago PMI for October surged to 61.1 against the anticipated 58.2 and supported the U.S. dollar. At 19:00 GMT, the Revised UoM Consumer Sentiment for October also rose to 81.8 against the forecasted 81.2 and supported the U.S. dollar. The Revised UoM Inflation Expectations for October came as 2.6% in comparison to September’s 2.7%. Despite the better than expected macroeconomic figures from the U.S., the U.S. dollar remained lower ahead of upcoming elections and weighed on GBP/USD pair on Friday.

Furthermore, the Brexit developments also helped the GBP/USD pair to stay higher in such circumstances this week. The Chief EU Negotiator Michel Barnier extended his stay in London to discuss the Brexit deal with his U.K. counterpart. The fact that he has delayed his stay also gave some hope that progress has been made in Brexit proves and supported GBP/USD pair.

The reports also suggested that both sides have almost reached an agreement over the state aid issue, and the only sticking point in the UK-EU deal left was the fisheries. These Brexit developments in depressing circumstances supported the GBP/USD pair on Friday.

Daily Technical Levels

Support Resistance

1.2909     1.3057

1.2839     1.3135

1.2762     1.3205

Pivot point: 1.2987

GBP/USD– Trading Tip

The GBP/USD is trading sharply bearish to trade over the double bottom support area of 1.2910 level. On the 2 hour timeframe, the GBP/USD pair has formed a downward channel, and bearish trend continuation can lead the pair further lower towards the next support area of 1.2830 level. However, to see that kind of selling, the Cable needs to violate the immediate support area of 1.2910. The MACD and 50 EMA support selling; therefore, we should look for a selling trade below the 1.2910 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.673 after placing a high of 104.740and a low of 104.123. The USD/JPY pair extended its previous daily gains and rose for the second consecutive session on Friday.

The U.S. dollar was moving back and forth on Friday within the previous ranges, however, was unable to find a significant recovery. The second round of lockdown in Europe and the cautious market mood ahead of the U.S. Presidential elections kept the pair higher as the risk-averse market sentiment was gaining traction.

On the macroeconomic front, at 04:30 GMT, the Tokyo Core CPI for the year remained flat at -0.5%. The Unemployment Rate from Japan declined to 3.0% in September from the forecasted 3.1% and supported the Japanese Yen. At 04:50 GMT, the Prelim Industrial Production for September also raised to 4.0% from the expected 3.0% and supported the Japanese Yen. At 10:00 GMT, the Housing Starts from Japan for September dropped to -9.9% from the forecasted -8.6% and weighed on the Japanese Yen and supported the upside momentum in the USD/JPY pair.

From the U.S. side, at 17:30 GMT, the Core PCE Price Index for September remained flat at 0.2%. The Personal Spending for September advanced to 1.4% from the expected 1.0% and supported the U.S. dollar. The Employment Cost Index for the quarter came in line with the expectations of 0.5%. The Personal Income for September raised to 0.9% from the forecasted 0.3% and supported the U.S. dollar.

 At 18:45 GMT, the Chicago PMI for October surged to 61.1 against the expectable 58.2 and supported the U.S. dollar. At 19:00 GMT, the Revised UoM Consumer Sentiment for October also advanced to 81.8 against the anticipated 81.2 and helped the U.S. dollar. The Revised UoM Inflation Expectations for October came as 2.6% in comparison to September’s 2.7%.

The stronger than expected data from the U.S. side also supported the USD/JPY pair’s upside movement on Friday. Meanwhile, the market mood was inclined towards the U.S. dollar demand in safe-haven as the growing number of infections in Europe forced the governments to impose lockdowns, which raised concerns over the global economic recovery when the economies were already struggling.

Furthermore, on Friday, the Federal Reserve declared that it will amend its main street lending program to support better small businesses that were still fighting the crisis of coronavirus pandemic. The central bank revealed that it would reduce the minimum amount that can be borrowed by the small & medium-sized businesses from $250,000 to $100,000. The Federal Reserve said that the change in the main-street lending program had been made to support pandemic-hit small companies. These announcements from the Fed weighed on the U.S. dollar and kept the gains in USD.JPY pair limited on Friday.

Daily Technical Levels

Support Resistance

104.07     104.53

103.86     104.78

103.62     104.99

Pivot point: 104.32

USD/JPY – Trading Tips

The USD/JPY is trading slightly bullish at the 104.745 level, having crossed over the immediate resistance area of the 104.600 mark. On the 2 hour timeframe, the USD/JPY has violated the downward trendline at 104.550 level, and now the same level is likely to support the USD/JPY pair. The closing of candles over 104.650 level is supporting strong odds of bullish trend continuation until 105.049 level. Further bullish trend continuation can also lead the USD/JPY pair towards the 105.800 level, but, I’m afraid, traders will wait for the U.S. Elections and the U.S. NFP later this Friday. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 2 – Ethereum’s Price Explodes; Bitcoin’s Whitepaper Celebrates its 12th Birthday

The cryptocurrency sector was full of volatility over the weekend as Bitcoin tried to break the $14,000 mark. Bitcoin is currently trading for $13,735, representing a decrease of 0.13% on the day. Meanwhile, Ethereum gained 3.12% on the day, while XRP gained 1.31%.

The cryptocurrency sector was full of volatility over the weekend as Bitcoin tried to break the $14,000 mark. Bitcoin is currently trading for $13,735, representing a decrease of 0.13% on the day. Meanwhile, Ethereum gained 3.12% on the day, while XRP gained 1.31%.

The cryptocurrency sector was full of volatility over the weekend as Bitcoin tried to break the $14,000 mark. Bitcoin is currently trading for $13,735, representing a decrease of 0.13% on the day. Meanwhile, Ethereum gained 3.12% on the day, while XRP gained 1.31%.

 Daily Crypto Sector Heat Map

Taking a look at the top 100 cryptocurrencies, Ocean Protocol gained 20.20% in the past 24 hours, making it the crypto to gain the most in a day. Aave (10.97%) and Ox (8.84%) also did great. On the other hand, ABBC Coin lost 10.72%, making it the most prominent daily loser. It is followed by CyberVain’s loss of 7.62% and Ren’s loss of 3.92%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance level had stayed at the same place since we last reported, with its value is currently 63.1%. This value represents a 0% difference when compared to the value it had on Friday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased slightly over the weekend. Its current value is $404.52 billion, representing a $4.91 million increase compared to our previous report.

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What happened in the past 24 hours?

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Technical analysis

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Bitcoin

The largest cryptocurrency by market cap had quite a volatile weekend, with its price breaking the $13,900 mark at one point and even reaching as high as $14,100. However, this price didn’t hold up, and Bitcoin fell back below $13,900, where it is consolidating at the moment. Bitcoin is now trading within a tight range, bound by $13,570 to the downside and $13,900 to the upside. History has shown us that BTC doesn’t stay range-bound for long; thus, we may expect a large move soon.

Traders should look for a trade when Bitcoin breaks one of its immediate resistances.

BTC/USD 4-hour Chart

Bitcoin’s overview on all time-frames is slightly bullish, with hints of neutrality. The neutrality is more present on the shorter time-frames as opposed to less neutrality on longer time-frames.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is far above its 50-period EMA and above its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is neutral (53.43)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $13,900                                 1: $13,570

2: $14,000                                 2: $13,180

3: $14,660                                  3: $12,870

Ethereum

Ethereum had spent the weekend slowly following the ascending channel bottom line until Sunday when its price bounced off and pushed past $400. The second-largest cryptocurrency by market cap managed to reach as high as $405 before pulling back and consolidating. The fight for $400 will continue, and it will decide if Ethereum will push towards $415 and $420 in the near future or not.

Traders should look for Ethereum’s break (or the failure to break) the $400 level and trade off of that.

ETH/USD 4-hour Chart

Ethereum’s 4-hour technicals have changed to a strong buy after Ether’s price spike, while its daily, weekly, and monthly time-frames are all slightly bullish with hints of 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 close to being overbought (64.51)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $400                                     1: $378

2: $415                                     2: $371

3: $420                                      3: $361

Ripple

The fourth-largest cryptocurrency by market cap spent the weekend consolidating below the $0.2454 level, which it has dropped below just before the weekend started. XRP tested both the $0.235 downside and $0.2454 upside, and both have proven to be strong support/resistance levels, which has left XRP range-bound.

XRP will take a lot of buying power to break above $0.2454 again, which means that the traders should consider trading sideways inside the range XRP is currently in.

XRP/USD 4-hour Chart

XRP’s daily, weekly, and monthly technicals are all showing a strong tilt towards the sell-side, while its 4-hour overview is slightly bullish with hints of neutrality.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price below its 50-period EMA and above its 21-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is neutral (50.10)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $0.26                                     1: $0.2454

2: $0.266                                   2: $0.235

3: $0.27                                    3: $0.227

 

Categories
Crypto Market Analysis

BTC/USD Chart Overview + Possible Outcomes

In this weekly BTC /USD analysis, we will be looking at the most recent events, the current technical formations, as well as discussing possible outcomes.

In this weekly BTC /USD analysis, we will be looking at the most recent events, the current technical formations, as well as discussing possible outcomes.

In this weekly BTC /USD analysis, we will be looking at the most recent events, the current technical formations, as well as discussing possible outcomes.

Overview

Bitcoin has spent another week pushing towards the upside. This time, it has passed the resistance zone at ~13,200 and pushed further towards the 2019 yearly high of $13,900. Breaking this level signifies a crucial move towards reaching all-time highs as the zone between $13,900 and the $20,000 level has close to no volume, meaning that it is “air-filled.” The moves in this zone will include a lot of volatility due to people taking profits as well as FOMO-ing in.

Technical factors



Bitcoin has conquered the ~13,200 zone after a week of trading above it and a couple of retests. However, a new high is in sight, the 2019 yearly high of $13,900.

Bitcoin is booming with bullish indicators, with its downside being guarded by the 21-period moving average, as well as hash ribbons making a crossover into miner capitulation (a huge bullish signal).
Hash Ribbons are great for detecting market bottoms or preparations for another spike, and it is one of the indicators that has provided traders with the most stable and predictable returns (and with low drawdowns).

However, the technicals factors will have no effect on the strength of the move once it happens, and Bitcoin’s short-term direction will remain unclear until it confidently breaks or pulls back from the $13,900 level.

Likely Outcomes

Bitcoin has two main scenarios it can play out, which will depend on how the “fight” for $13,900 ends.
1: If it confirms its position above the level, we can expect the unexpected, as there is close to no sell pressure above. However, many will start taking profits so unexpected downswings might happen. With that being said, the most likely target after breaking $13,900 is $13,640, which is one of the small consolidation points which happened during the 2017/2018 spike.
2: The other scenario is just as likely, and involves Bitcoin rejecting $13,900, thus creating a double top and a short-term pullback. This pullback might end at the $13,200 zone, which historically has a lot of buy and sell pressure, or even further down towards $12,470.

We also have to note that, whichever of these scenarios play out, Bitcoin’s overall sentiment is extremely bullish and that investors that do not like trading should just stick with what they are comfortable with.

Categories
Forex Course

165. Knowing More About Trading The Euro & Yen Crosses

Introduction

Introduction

Introduction

In cross-currency trading, the Euro and Japanese Yen are the most traded currency. Therefore, after major currencies, EUR and JPY has the highest liquidity in the forex market. Overall, trading in the Euro and Yen crosses are secure compared to the other cross currencies.

Understand the European Economy

When trying to trade in any Euro cross pairs, we should understand the European economy even if we only follow technical analysis. In technical analysis, traders can make decisions based on previous price movements. Therefore, many traders think that there is no need for fundamental analysis.

However, in trading, we aim to increase the probability of our analysis. Therefore, when we add Europe’s economic condition, we will have a better outlook of trading Euro crosses like- EURCHF, EURAUD, EURNZD, etc.

The European economy consists of several countries, including France, Italy, Germany, etc. Therefore, trading in the Euro cross requires to know interest rate decisions, retail sales, employment export-import, GDP, and other economic releases of these countries.

Moreover, in Euro cross trading, we should focus on other currencies that combine with the Euro. For example, if we want to trade in the EURCHF pair, we should focus on Switzerland’s economic condition.

Understand the Japanese Economy

In Yen cross trading, we should have extensive knowledge of the Japanese economy. Japan is an export-oriented country. Therefore, it tries to depreciate its value against other major currencies by keeping the interest rate lower.

Overall, any increase in interest rate, retail sales, employment, and GDP are suitable for the Japanese economy.

Besides the Japanese economy, we need to understand the economic condition of the Japanese Yen combination. For example, trading in the CADJPY pair requires a fundamental analysis of both the Japanese and Canadian economies.

Conclusion

Overall, the Euro and Japanese Yen cross are mostly traded currency in currency crosses. Therefore, to trade Euro and Yen crosses, we should know these two countries’ economic conditions. Even if we don’t trade based on fundamental analysis, having good knowledge is essential to have an overall outlook of the economy. Cheers.

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Categories
Forex Signals

AUD/USD Choppy Session Continues – Brace for Breakout Signal! 

The AUD/USD pair was closed at 0.70309 after placing a high of 0.70757 and a low of 0.70021. The AUD/USD pair extended its previous daily losses on Thursday and dropped further below towards its lowest level since May 19th. The decline in the AUD/USD pair was understandable ahead of the next week’s massive risk events. The Reserve Bank of Australia and the US election on the same day. The currency pair started rushing towards the crucial support at the 0.700 handle due to the strength of the US dollar.

The AUD/USD pair was closed at 0.70309 after placing a high of 0.70757 and a low of 0.70021. The AUD/USD pair extended its previous daily losses on Thursday and dropped further below towards its lowest level since May 19th. The decline in the AUD/USD pair was understandable ahead of the next week’s massive risk events. The Reserve Bank of Australia and the US election on the same day. The currency pair started rushing towards the crucial support at the 0.700 handle due to the strength of the US dollar.

The AUD/USD pair was closed at 0.70309 after placing a high of 0.70757 and a low of 0.70021. The AUD/USD pair extended its previous daily losses on Thursday and dropped further below towards its lowest level since May 19th. The decline in the AUD/USD pair was understandable ahead of the next week’s massive risk events. The Reserve Bank of Australia and the US election on the same day. The currency pair started rushing towards the crucial support at the 0.700 handle due to the strength of the US dollar.

The US dollar was strong across the board ahead of the US Presidential election on November 3rd due to many factors including the latest uncertainty over the next round of US stimulus measures. The House Speaker Nancy Pelosi has weighed on market hopes for the successive CARES package by saying that the Trump administration would have to answer her on many critical issues before getting a consensus on the US stimulus package.

The investors that were waiting for elections to come next week and after that a stimulus measure will be passes, were disappointed after these comments and their hopes vanished that the same stalemate will continue even after the elections. These concerns weighed on market sentiment and dragged the AUD/USD pair on the downside.

On the data front, at 05:30 GMT, the Import Prices for the quarter dropped to -3.5% from the projected -2.1% and weighed on the Australian dollar and added in the losses of AUD/USD pair. The NAB Quarterly Business Confidence came in as -10 against the previous -15 in the third quarter.

From the US side, at 17:30 GMT, the Advanced GDP for the quarter rose to 33.1% from the forecasted 32.0% and supported the US dollar. The Unemployment Claims for the previous week fell to 751K from the projected 773K and supported the US dollar. At 17:32 GMT, the Advance GDP Price Index for the quarter surged to 3.6% from the forecasted 2.9% and supported the US dollar. At 19:00 GMT, the Pending Home Sales for September was chopped down to -2.2% from the anticipated 3.1% and weighed on the US dollar.

Most of the macroeconomic data from the US like GDP and Unemployment Claims came in better than expected and supported the US dollar that ultimately weighed on AUD/USD pair on Thursday.

Daily Technical levels

Support Resistance

0.7002 0.7122

0.6959 0.7201

0.6881 0.7243

Pivot point: 0.7080

The AUD/USD pair is trading with a bearish bias below 0.7047 level, the resistance level that’s extended downward trendline support area of 0.7047 level. Continuation of a selling trend in the AUD/USD pair may lead the AUD/USD price towards the support area of 0.7005, and below this, the AUD/USD pair may find next support around 0.6967. I will consider opening a selling trade below 0.7069 area today. Good luck! 

Categories
Forex Market Analysis

US Dollar Index Advances Boosted by Surprising Economic Growth

Overview

Overview

Overview

The US Dollar Index accelerated its gains on Thursday’s trading session boosted by the surprising economic recovery in Q3 2020 that advanced 33.1%, beating analysts’ expectations. Nevertheless, although Greenback’s intraday recovers, the price could see a new decline in the coming trading sessions.

Market Sentiment 

The US Dollar Index (DXY) raises on Thursday trading session by 0.54%, boosted by Q3’s GDP growth rate, which beat the analysts’ expectations.

The US economy expanded in the third quarter by 33.1% in Q3 2020, beating the analysts’ consensus of a 31% raise. This reading is the biggest expansion in the economy following the previous  Q2 period, which unveiled a record 31.4% plunge triggered by the coronavirus lockdown.

The following chart exposes the US Dollar Index in its daily timeframe. The figure unveils the 90-day high and low range, the price action moving mostly sideways in the bearish sentiment zone. 

Likewise, the intraday activity develops a strong bullish movement during its Thursday’s trading session, which looks accelerating, supported, as already said, by the surprising Q3 GDP growth, whose figure was released on Thursday before the US session’s opening bell. 

In summary, the US Dollar Index context shows that the big picture of the market is on the bearish side. However, the intraday activity reveals an upward thrust representing an upward correction of the Greenback’s primary bearish trend.

Technical Analysis Outlook

On the technical side, the US Dollar Index unveils its price movements in an incomplete corrective formation, which still could visit fresh lows.

The next weekly chart and in log scale reveals the DXY under the perspective of the Dow Theory, which exposes to its primary trend developing an incomplete correction of the rally that the Greenback began in early May 2011 and found resistance at 103.82 in late December 2016.

Once the Dollar Index found fresh buyers, the public activity raised, driving the price towards the level of 103.82, where DXY began to develop a corrective move, which remains in progress. The first decline fell to 50% of the previous rally, finding support at 88.25, where the price reacted, developing an upward sequence.

Actually, the price action develops a consolidation structure following a sideways formation, which is in progress since early January 2018. The third segment, which looks in place, accumulates a retracement of around 66% of the corrective formation’s second internal leg. This reading leads us to observe that the current decline could be in an exhaustion stage.

The long-term Elliott Wave perspective for DXY marks its advancement in an incomplete flat pattern (3-3-5), which currently advances in its wave C of Minor degree labeled in green. This current leg could see further declines in the coming trading sessions.

As illustrated in the next 2-day chart, DXY advances its wave ((iv)) of Minute degree identified in black. According to the alternation principle, the internal segment should take more time than wave 2. In this regard, the level of complexity of this corrective formation should be higher than on the second wave. In other words, the fourth wave could be a triangle formation or a double or triple correction.

Finally, the wave C’s potential bearish target can be located below the mid-February 2018 low; it is near the 87.5 level, where the Greenback could start to develop a new bullish cycle of upper degree. The invalidation level of the current bearish scenario is placed at 98.50.

Categories
Forex Course

163. Trading Currency Crosses Using Fundamentals

Introduction

Introduction

Introduction

In fundamental analysis, we can interpret two countries’ economic data of a cross-currency to predict the upcoming price movement. On the other hand, even if we ignore the US dollar, it has some shadow effect on a currency cross.

How to Trade Fundamentals with Currency Crosses

Let’s say Australia’s economic condition is good, and the Reserve Bank of Australia increased the interest rate. As a result, the primary expectation is that the AUD will be stronger against other currencies. On the other hand, we can find other currencies that are facing economic difficulties. Let’s say Eurozone is struggling, and ECB provided some dovish tone to provide an outlook of the current economic condition.

In this situation, we can evaluate the Eurozone’s economic condition and Australia to determine which country is doing well. If Australia shows a better than expected employment report, our first aim would be to buy AUDUSD. However, what happens if the USA showed a strong employment report?

Yes, AUDUSD might consolidate, and the difference between supply and demand would not change. In this situation, it is better to find other currencies that are weaker than in Australia.

Is Fundamental Trading Profitable for Currency Crosses?

In Forex trading, we predict a currency pair’s upcoming movement based on the technical and fundamental analysis. When we see that one currency has reason to become stronger than other currencies, we anticipate the price towards the stronger currency. The fundamental analysis is a process to find a stronger or weaker currency in a currency pair.

Due to having a lot of equity and market participants’ involvement, any fundamental news works well in USD related currency pairs. However, it does not mean trading currency crosses with fundamental analysis is not profitable.

We can quickly evaluate the UK and Japan’s economic conditions to identify the price direction of GBPJPY. Therefore, we can apply the same theory to every currency cross, like AUDJPY, AUDCHF, NZDCAD, or AUDNZD.

Concussion

Fundamental analysis is a process to anticipate the movement of a currency pair based on the two countries’ economic conditions. However, making an analysis ideally is the primary tool to make a profit from the forex market. Therefore, we should focus on money management, risk management, and trade management to get the ultimate trading result.

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Categories
Forex Market Analysis

Daily F.X. Analysis, October 30 – Top Trade Setups In Forex – Series of GDP Ahead! 

On the news front, the economic calendar is due to a report series of CPI and GDP figures from the European economy. These events are likely to be overshadowed by the U.S. Personal Pending, Chicago PMI, and Revised UoM Consumer Sentiment, which are expected to slightly worse than beforehand. This may add further bearish bias for the U.S. dollar today.

On the news front, the economic calendar is due to a report series of CPI and GDP figures from the European economy. These events are likely to be overshadowed by the U.S. Personal Pending, Chicago PMI, and Revised UoM Consumer Sentiment, which are expected to slightly worse than beforehand. This may add further bearish bias for the U.S. dollar today.

On the news front, the economic calendar is due to a report series of CPI and GDP figures from the European economy. These events are likely to be overshadowed by the U.S. Personal Pending, Chicago PMI, and Revised UoM Consumer Sentiment, which are expected to slightly worse than beforehand. This may add further bearish bias for the U.S. dollar today.

Economic Events to Watch Today  

 

Economic Calendar by TradingView

EUR/USD – Daily Analysis

The EUR/USD pair’s prices were closed at 1.16742 after placing a high of 1.17587 and a low of 1.16500. The EUR/USD pair extended its previous daily losses and continued its bearish streak for the 4th consecutive session on Thursday. EUR/USD pair dropped to its more than one month lowest level on Thursday amid the broad-based U.S. dollar strength along with the rising number of lockdown restrictions in Europe.

The sharp decline in Euro against the U.S. dollar was derived by the European Central Bank’s decision on Thursday to hold its interest rates but gave signals that another monetary policy tool remains, and the bank would recalibrate its policy tools in December. As per the President of the European Central Bank, Christine Lagarde, it was necessary to cushion the European economy through pandemic and recalibrate its instruments at their next Governing Council meeting.

Lagarde refrained from expressing that the bank was looking at using all instruments rather than just topping up the 1.35 trillion euros PEPP at its upcoming Dec.10th meeting. Lagarde warned that the risks to the Eurozone recovery were tilted to the downside and suggested the pace to recovery or lack thereof would largely depend on the efforts of the economic bloc to contain the virus spread.

The growth of the Eurozone economy has come under pressure as the two biggest economies of the European Union, France, and Germany, have been forced to re-impose lockdown measures and raised the urgency to deliver more easing at the end of the year.

The Euro currency remained under pressure on Thursday after Lagarde’s comments and the central bank’s decision that ultimately added pressure on EUR/USD pair.

For October, the German Prelim CPI raised to 0.1% from the forecasted 0.0% and supported the single currency Euro on the data front. At 13:00 GMT, the Spanish Flash CPI for the year declined to -0.9% from the forecasted -0.4% and weighed on the single currency Euro that added pressure on EUR/USD pair. At 13:55 GMT, the German Unemployment Change for September came in as -35K against the forecasted -5K and supported the single currency Euro.

At 17:30 GMT, the Advanced GDP for the quarter raised to 33.1% from the estimated 32.0% and supported the U.S. dollar from the U.S. side. The Unemployment Claims for the previous week slipped to 751K from the anticipated 773K and supported the U.S. dollar. At 17:32 GMT, the Advance GDP Price Index for the quarter surged to 3.6% from the projected 2.9% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales for September dropped to -2.2% from the projected 3.1% and weighed on the U.S. dollar. Most of the US-supported data weighed on EUR/USD pair towards the downside and added in the losses of the currency pair on Thursday.

Daily Technical Levels

Support Resistance

1.1798 1.1789

1.1672 1.1834

1.1626 1.1870

Pivot point: 1.1753

EUR/USD– Trading Tip

The EUR/USD traded with a bearish bias, having dropped to the support area of 1.1653. Above this, the pair has strong odds of taking a bullish turn until the 1.1700 area. Continuation of an upward trend may lead the EUR/USD price towards 1.1758, and bullish crossover of this area can lead the pair towards the 1.1820 level. Conversely, a bearish crossover of 1.1653 support level can extend selling until the 1.1613 area as a double bottom support area extends the level.  

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29126 after placing a high of 1.30255 and a low of 1.28806. The GBP/USD pair extended its previous daily losses and remained bearish on Thursday. The GBP/USD pair moved to its lowest level in almost 2-weeks and then recovered some of its losses in the late trading session on Thursday. The strength of the U.S. dollar drove the decline in the GBP/USD pair.

The U.S. dollar was strong due to the emerging risk-averse market sentiment and the strong macroeconomic data for the day. The delayed U.S. stimulus measure also helped the U.S. dollar to remain strong in the market. The U.S. Dollar Index (DXY) climbed above 94.00 level, its highest in almost a month, on Thursday as the risk-averse market sentiment emerged. The strong U.S. dollar added pressure on GBP.USD pair and dragged them to its 10-days lowest level.

On the data front, at 14:30 GMT, the M4 Money Supply for September raised 0.9% from the forecasted 0.3% and supported British Pound. At 14:32 GMT, the Mortgage Approvals raised to 91K from the forecasted 76K and supported British Pound. The Net Lending to Individuals came in line with the expectations of 4.2B. Britain’s data supported the local currency Sterling that capped further losses in the GBP/USD pair on Thursday.

From the U.S. side, at 17:30 GMT, the Advanced GDP for the quarter surged to 33.1% from the projected 32.0% and supported the U.S. dollar. The Unemployment Claims for the previous week fell to 751K from the estimated 773K and supported the U.S. dollar. At 17:32 GMT, the Advance GDP Price Index for the quarter advanced to 3.6% from the anticipated 2.9% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales for September fell to -2.2% from the expected 3.1% and weighed on the U.S. dollar. The better than expected data from the U.S. supported the local currency U.S. dollar that added pressure on the declining GBP/USD pair’s prices.

On the Brexit front, the negotiations between the E.U. and U.K. were in progress with no headlines for the time being. However, the hopes were high that a deal could be reached this time as both sides were eager to solve the impasse given the limited time left for the end of the transition period. If a deal is reached, then British Pound will see a sharp rise in prices; however, analysts believe that a Brexit deal would likely offer only temporary relief for British Pound. They believe that Sterling’s near-term outlook will continue to be dominated by the late-stage Brexit negotiations that would include the significant trade frictions, the threat of tariffs and quotas.

It means that a Brexit deal between the E.U. and U.K. would not remove all the risks for British Pound and that sterling will still have to face further difficulties even after an agreement is reached.

Daily Technical Levels

Support Resistance

1.2909 1.3057

1.2839 1.3135

1.2762 1.3205

Pivot point: 1.2987

GBP/USD– Trading Tip

The GBP/USD is trading sharply bearish since the violation of the symmetric triangle pattern at the 1.3017 level, and the formation of bearish candles below the 1.3017 level has driven strong selling until the 1.2913 support area. For the moment, the Cable my lead GBP/USD price towards 1.3046 level for the sake of bullish correction. Conversely, the GBP/USD pair may find immediate support at 1.2913, and a bearish breakout of this level can be captured until the 1.2840 level.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.593 after placing a high of 104.725 and a low of 104.023. The USD/JPY pair rose on Thursday and posted gains after falling for two consecutive sessions on the back of the strong U.S. dollar and the better than expected macroeconomic data from the U.S., along with the disappointing data from Japan.

At 04:50 GMT, the Retail Sales from Japan for September dropped to -8.7% from the forecasted -7.5% and weighed on the Japanese Yen that added strength to the USD/JPY pair. At 10:00 GMT, the Consumer Confidence for October in Japan declined to 33.6 from the forecasted 35.2 and weighed on the Japanese Yen that supported the USD/JPY pair’s bullish move.

From the U.S. side, at 17:30 GMT, the Advanced GDP for the quarter advanced to 33.1% from the estimated 32.0% and supported the U.S. dollar. The Unemployment Claims for the previous week slipped to 751K from the anticipated 773K and supported the U.S. dollar. At 17:32 GMT, the Advance GDP Price Index for the quarter raised to 3.6% from the estimated 2.9% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales for September declined to -2.2% from the projected 3.1% and weighed on the U.S. dollar.

The better than expected data from the U.S. gave strength to the U.S. dollar that ultimately added further gains to the USD/JPY pair on Thursday. Meanwhile, the U.S. dollar was also strong due to the comments from the Head of Congress and White House that signaled a tough road ahead for a coronavirus stimulus even after the next week’s U.S. election.

The U.S. Congress delivered a Coronavirus Aid, Relief, and Economic Security (CARES) stimulus worth about $3 trillion. Since then, the Democrats and the Republicans have been locked in a stalemate on a successive package to CARES. The differences have been over the size of the next relief bill among both parties. Over the last two weeks, the hopes that a coronavirus relief package will be delivered before elections faded away despite the months of negotiations between Democrats & Republicans. The investors thought that a deal might be reached after the election, regardless of the winner.

However, the Speaker of the House of Representatives, Nancy Pelosi, revealed on Thursday that these hopes that a package will be delivered after the elections without any difficulty were not right as Republicans were yet to answer her on funding for several critical areas. The uncertainty and lack of hopes that a stimulus will be delivered even after elections raised the U.S. dollar and added further gains in the USD/JPY pair on Thursday. However, the USD/JPY currency pair’s gains were limited due to the emerging risk-averse market sentiment in the market on Thursday.

Daily Technical Levels

Support Resistance

104.07 104.53

103.86 104.78

103.62 104.99

Pivot point: 104.32

USD/JPY – Trading Tips

The bearish bias in the USD/JPY continues to extend the bearish bias; however, it’s trading within a choppy trading range now. The choppy range may provide resistance at 104.505 to 104.200 area. Violation of this range can trigger further selling until the 103.900 level. The MACD and RSI support selling bias today; therefore, we will be looking to enter a selling trade below 104.24 today. A violation of this level has high odds of leading the USD/JPY pair further lower towards the 103.900 level. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Oct 30 – Bitcoin Bounces Back Above $13,500; XRP Breaks Crucial Support Level

The cryptocurrency sector was full of volatility today but ended the day with close to no gains. Bitcoin is currently trading for $13,561, representing an increase of 2.50% on the day. Meanwhile, Ethereum gained 0.01% on the day, while XRP lost 1.12%.

The cryptocurrency sector was full of volatility today but ended the day with close to no gains. Bitcoin is currently trading for $13,561, representing an increase of 2.50% on the day. Meanwhile, Ethereum gained 0.01% on the day, while XRP lost 1.12%.

The cryptocurrency sector was full of volatility today but ended the day with close to no gains. Bitcoin is currently trading for $13,561, representing an increase of 2.50% on the day. Meanwhile, Ethereum gained 0.01% on the day, while XRP lost 1.12%.

 Daily Crypto Sector Heat Map

None of the top100 cryptocurrencies gained much over the course of the day. NEM gained 3.57% in the past 24 hours, making it the crypto to gain the most in a day. Celsius (2.68%) and FTX Token (2.63%) also did great. On the other hand, yearn.finance lost 16.68%, making it the most prominent daily loser. It is followed by Ocean Protocol’s loss of 16.06% and Reserve Rights’ loss of 15.74%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance level had increased since we last reported, with its value is currently 63.1%. This value represents a 0.8% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased slightly in the past 24 hours. Its current value is $399.63 billion, representing a $6.58billion increase compared to our previous report.

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What happened in the past 24 hours?

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Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization had quite a volatile day, with its price bouncing back from the $13,180 resistance and pushing up. While the price has reached ~$13,700 level, it has pulled back since, currently contesting the $13,570 resistance.

Traders should look at Bitcoin contesting the $13,570 level and trade in whichever direction the price confirms its move in.

BTC/USD 4-hour Chart

Bitcoin’s 4-hour and weekly overviews are neutral bullish, while its daily and monthly overviews are tilted towards the buy-side with close to no neutrality.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is far above its 50-period EMA and above its 21-period EMA
  • Price slightly above its middle Bollinger band
  • RSI is ascending towards overbought (59.94)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $13,570                                 1: $13,180

2: $13,900                                 2: $12,870

3: $14,000                                  3: $12,500

Ethereum

Ethereum had, just like Bitcoin, quite a volatile day today. Its price first bounced off of the ascending channel bottom line, which prompted a push towards $395 before falling yet again. As things stand now, the leg down is still not over yet, and Ethereum is yet to decide whether it will change its course towards the upside or break the channel down.

Traders should look for Ethereum’s response to the bottom channel line and trade in continuation to where it chooses to go.

ETH/USD 4-hour Chart

Ethereum’s technicals on all time-frames except for the 4-hour one are tilted towards the buy-side, with hints of neutrality. On the other hand, its 4-hour time-frame is tilted towards the sell-side with slight hints of neutrality.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is below its 50-period and its 21-period EMA
  • Price is between its middle and bottom Bollinger band
  • RSI is neutral (40.64)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $400                                     1: $378

2: $415                                     2: $371

3: $420                                      3: $361

Ripple

The fourth-largest cryptocurrency by market cap had a bad day, as its price dropped below the crucial $0.2454 support level. XRP tried to recover and went above it at one point but failed to keep the price above the level, therefore triggering another push towards $0.24, where it is currently consolidating.

It is hard to say how traders should look at XRP, though the outlook is certainly bearish. Any push towards the upside will almost certainly result from Bitcoin making a large move towards the upside.

XRP/USD 4-hour Chart

XRP’s technicals are uniformed in its bearishness, with the 1-day and monthly overviews showing a bit more neutrality than the others.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price well below both its 50-period EMA and its 21-period EMA
  • Price is slightly above its bottom Bollinger band
  • RSI is near oversold (35.97)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $0.2454                                 1: $0.235

2: $0.26                                     2: $0.227

3: $0.266                                  3: $0.221

 

Categories
Forex Videos

UK FTSE looking to retest May’s low?

https://youtu.be/aKM63ig6DT0

https://youtu.be/aKM63ig6DT0

UK FTSE looking to retest May low?

 

Thank you for joining this forex academy educational video. In this session, we will be looking at the FTSE 100 index.

In this yearly chart, we can see the red highlighted low of 5,750, which was the low point from March having crashed down from January’s peak of just under 7,600 as a result of the Covid related pandemic causing the UK to go into lockdown. And while the higher peak shows a sharp rebound to 6,500 at the beginning of June, the value of the top 100 UK firms has been falling steadily since then to the current 6,000 at the time of writing.

Buy sharp comparison this is the Dow Jones industrial index yearly chart, showing a record high for the index in February of 29500 falling to a low of just above 18000 before a V-shaped recovery took it back to over 29,000, where practically 100% of the original crash was reversed. The NASDAQ fared even better, as did the S&P 500, both of which moved to all-time highs.
While it is impossible to suggest that the two economies are identical, the USA has enjoyed a bull run while the FTSE 100 has faded. And while the US economy is very slowly showing signs of a recovery, the numbers by no means suggest the economy of the USA is in a better shape than before the pandemic. So, what is the driving factor for one and effectively put the breaks on the other?

This can largely be put down to sentiment: the American economy is perceived to have the ability to achieve the same growth as before the pandemic, once the virus is defeated. Therefore, traders and investors have taken a long-term view that the US economy will recover and go on to see growth, and they are taking the risk that the stock market will reflect this at some point in the future. In other words, they see the economy catching up with the stock market rather than the traditional view that the stock market reflects the value of the economy.

However, investors in the British economy are slightly more subdued because of the worries that the British government and the European Union are at loggerheads heads with regards to any future trading relationship now that the UK has left the EU. This is because the European Union wants more regulatory alignment with Britain regarding its future trading arrangements and whereby financial services regulations need to be reflective of both economies and where, for example, safety standards and hygiene standards, remain level pegged, because the European Union has a duty to ensure that the citizens of the EU do not receive substandard services, or substandard food and food substances, or substandard electronics and motor cars and equipment, etc.

The EU has also placed pressure on the British government regarding fishing rights for the EU in British waters and where there seems to be no possibility of an agreement on this subject. And also another major stumbling block is the fact that Ireland is a part of the EU you and Northern Ireland is a part of the United Kingdom, and there is no border in place, in which case unchecked goods and services could move between the two areas, leaving the door open for infringements, including tax revenue losses and the movement of people without passports and livestock movements without regulatory checks by the EU. The whole thing is extremely complicated. But the bottom line is if these issues cannot be agreed upon in the next few weeks, there is a distinct possibility that no official trade agreements will be set in place, where the United Kingdom was hoping to have a free trade deal with the EU and in which case the UK will need to revert to world trade organization trading rules, which will be more expensive for the United Kingdom economy in the long run.
So where now?

The FTSE 100 is currently in a critical area, which is of psychological importance: 6,000. Should price action fall just under and then push up and find that the 6,000 area becomes a line of resistance, we could see price action fall down to the previous low of early September of 5,800 and, then, perhaps a retest of May’s low at just above the 5,700 level.

The longer that the EU and UK remain at loggerheads and cannot agree on a future trading relationship, the more chance we will see that this index will push lower and if the UK ends the transition period without a formal agreement at the end of December this year, the pressure will be on the FTSE 100 to fall even lower because we are still in the grips of the pandemic, coupled with WTO trading rules and no formal trading agreements in place with the EU or the USA, which will leave investors wondering how badly this will affect the British economy in the next 12-months.

Categories
Forex Market Analysis

Daily F.X. Analysis, October 29 – Top Trade Setups In Forex – Eyes on ECB Policy Rate! 

The focus will remain on the U.S. Advance GDP figures. GDP data expected to perform better than before as the data represents the economic activity of the lockdown period. Besides this, the major focus will remain on the ECB Monetary policy decision, where the ECB is expected to keep the interest rate unchanged. However, the increased number of  Covid-19 cases may trigger a dovish sentiment on the European official bank rate, and it may place bearish pressure on the single currency Euro. 

The focus will remain on the U.S. Advance GDP figures. GDP data expected to perform better than before as the data represents the economic activity of the lockdown period. Besides this, the major focus will remain on the ECB Monetary policy decision, where the ECB is expected to keep the interest rate unchanged. However, the increased number of  Covid-19 cases may trigger a dovish sentiment on the European official bank rate, and it may place bearish pressure on the single currency Euro. 

The focus will remain on the U.S. Advance GDP figures. GDP data expected to perform better than before as the data represents the economic activity of the lockdown period. Besides this, the major focus will remain on the ECB Monetary policy decision, where the ECB is expected to keep the interest rate unchanged. However, the increased number of  Covid-19 cases may trigger a dovish sentiment on the European official bank rate, and it may place bearish pressure on the single currency Euro. 

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17460 after placing a high of 1.17879 and a low of 1.17176. The EUR/USD pair dropped to its one week lowest level and remained bearish throughout the day. The Euro fell against the U.S. dollar on Wednesday ahead of the European Central Bank meeting amid the rising fears that the Eurozone’s economic recovery will be hard as Germany and France introduced fresh lockdown measures to control the spread of coronavirus infections.

A four-week lockdown was introduced by German Chancellor Angela Merkel on Wednesday for the country to control the spread of the virus. The partial lockdown will start from Monday, and under the restrictions, the hospital sector will likely ease as restaurants, bars, gyms, cinemas will be closed while schools, daycare centers, and kindergartens will remain open.

France that is already under curfew, will announce a nationwide lockdown on Friday. The President of France Emmanuel Macron has said that the measures they had taken to control the spread did not work out and were insufficient to counter the second wave of coronavirus affecting all of Europe.

Both Germany and France have seen a rise in coronavirus cases, with France expected to experience 100,000 new cases per day in the coming days. These fears that the lockdown measures will greatly impact the emerging European economic recovery weighed heavily on a single currency on Wednesday.

At 12:00 GMT, German Import Prices raised in September to 0.3% from the forecasted -0.3% and supported Euro currency on the data front. At 17:30 GMT, the Goods Trade Balance for September came in as -79.4B against the projected -84.8B and supported the U.S. dollar that weighed on EUR/USD prices. The Prelim Wholesale Inventories from the U.S. in September were reported as -0.1% against the expected 0.4% and supported the U.S. dollar added in the losses of EUR/USD pair on Wednesday.

On the U.S. dollar front, the United States also saw records high numbers of coronavirus cases; however, the U.S. dollar remained strong across the board. It seems like investors chose to invest in the greenback in these uncertain times due to its safe-haven status. The strong U.S. dollar weighed further on EUR.USD pair on Wednesday, and the prices continued moving in downside momentum.

Daily Technical Levels

Support Resistance

1.1779     1.1825

1.1762     1.1856

1.1732     1.1872

Pivot Point: 1.1809

EUR/USD– Trading Tip

The EUR/USD traded with a bearish bias, having dropped to the support area of 1.1745. Above this, the pair has strong odds of taking a bullish turn until the 1.1790 area. Continuation of an upward trend may lead the EUR/USD price towards 1.1790, and bullish crossover of this area can lead the pair towards the 1.1820 level. Conversely, a bearish crossover of 1.1745 support level can extend selling until the 1.1694 area. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29877 after placing a high of 1.30636 and a low of 1.29163. The GBP/USD pair dropped and posted losses on Wednesday. The GBP/USD pair dropped to its seven days lowest level on Wednesday amid broad-based U.S. dollar strength and the rising number of coronavirus cases in the U.K. The Brexit impasse, along with the U.S. elections uncertainty, also weighed on GBP/USD pair on Wednesday.

The U.S. dollar was strong across the board on Wednesday as the global coronavirus spread raised the greenback’s safe-haven allure. The British Pound lost as much as 1% against the U.S. dollar on Wednesday as investors withdraw due to decreased hopes for global economic recovery and increased risk-aversion market sentiment.

The uncertainties surrounding the U.S. elections were already weighing on the market sentiment, and the resurgence of coronavirus cases in Europe and the United States emerged that escalated the concerns. In the past week, the rate of deaths in Europe rose by almost 40%, and it challenged the narrative that the virus was relatively harmless that had encouraged the easing of lockdown measures for the sake of local economies.

Both Germany and France announced new lockdown measures to control coronavirus spread, and the U.K. was also expected to impose Tier-3 restrictions. These fears weighed heavily on the local currency British Pound that ultimately dragged the GBP/USD pair’s prices on Wednesday to its one-week lowest level.

On the data front, t 05:01 GMT, BRC Shop Price Index for October came in as -1.2% compared to -1.6%. Whereas, from the U.S. side, at 17:30 GMT, the Goods Trade Balance for September was reported as -79.4B against the expected -84.8B and supported the U.S. dollar that weighed on GBP/USD prices. The Prelim Wholesale Inventories from the U.S. in September came in as -0.1% against the anticipated 0.4% and supported the U.S. dollar that weighed on GBP/USD pair on Wednesday.

On the Brexit front, Britain and the European Union have just over two months to reach a trade agreement before the status-quo transition period ends on December 31. The E.U.’s chief negotiator, Michel Barnier, is in London for negotiations, and it is believed that progress has been made over some sticking points.

The sentiment has raised hopes that this time a deal will be reached between the U.K. and the E.U. by early November. According to Bloomberg, both sides have begun work on the text of the agreement on the level competitive playing field and were close to finalizing a joint document covering state aid.

These developments regarding Brexit-deal gave some ease to the market sentiment and capped further losses in the GBP/USD pair on Wednesday.

Furthermore, the Bank of England has shown willingness to go for negative rates that had been partially priced in the market and had kept the British Pound under pressure. Therefore, any such action by the bank would not come as a surprise in the upcoming meeting, and it means that a negative interest rate effect could be of secondary importance for GBP traders than a shock of Brexit in the coming days.

Daily Technical Levels

Support Resistance

1.3001     1.3081

1.2961     1.3121

1.2921     1.3161

Pivot Point: 1.3041

GBP/USD– Trading Tip

The GBP/USD has violated the symmetric triangle pattern at the 1.3017 area, and closing of candles below the 1.3017 level has driven strong selling until the 1.2915 support area. On the higher side, the Cable my lead GBP/USD price towards 1.3046 level. For now, the GBP/USD pair may find an immediate resistance at 1.3046 are, and below this, selling can be captured until 1.2980 and 1.2919 level.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.307 after placing a high of 104.554 and a low of 104.111. The USD/JPY pair remained bearish and placed losses on Wednesday. The USD/JPY pair has posted slight losses on Wednesday despite the broad-based U.S. dollar strength. The Japanese Yen has gained about 1.2% throughout the last three weeks in October and has weighed on the USD/JPY pair. The USD/JPY pair dropped on Wednesday to its lowest level since September 21.

The U.S. dollar was strong on Wednesday as its safe-haven status got attention after European nations started re-imposing lockdown measures to control the virus’s spread. However, the U.S. dollar’s strength could not reverse the USD/JPY pair’s movement on Wednesday as traders were focused more on the Bank of Japan’s decision in its upcoming monetary policy meeting on Thursday.

Bank of Japan is up to hold its monetary policy meeting on Thursday, and investors were pricing the potential moves by it ahead of the meeting. The Bank of Japan is expected to keep its rates unchanged at -10bps while maintaining a 10-year JGB yield target at 0.0%. The Bank of Japan has extended a deadline for two virus linked funding programs and enlarged asset purchases. As mentioned by the quarterly assessment report, the central bank has downgraded this fiscal year’s economic and inflation outlooks.

As the outlook reviews have already been priced in the market, any hint over additional monetary easing through Q.E. in December on Thursday could have a major impact on the Japanese yen and ultimately on the USD/JPY pair. Furthermore, the coronavirus cases in the United States were rising day by day and weighed on local currency as the chances for a fresh lockdown increased with the increased number of COVID-19 infections. Over the last seven days, the U.S. reported about half a million new coronavirus cases, and it has raised both economic and health-related concerns that have weighed on the local currency U.S. dollar. The USD/JPY pair also followed these rising concerns and kept moving in the downward direction on Wednesday.

On the data front, from the U.S. side, at 17:30 GMT, the Goods Trade Balance for September came in as -79.4B against the anticipated -84.8B and supported the U.S. dollar. The Prelim Wholesale Inventories from the U.S. in September came in as -0.1% against the projected 0.4% and supported the U.S. dollar. The strong U.S. dollar failed to reverse the USD/JPY pair’s negative momentum on Wednesday, and the pair kept falling towards its multi-week lowest level.

Daily Technical Levels

Support Resistance

104.22     104.73

104.05     105.07

103.70     105.25

Pivot point: 104.56

USD/JPY – Trading Tips

The bearish bias in the USD/JPY continues to extend the bearish bias; however, it’s trading within a choppy trading range now. The choppy range may provide resistance at 104.505 to 104.200 area. Violation of this range can trigger further selling until the 103.900 level. The MACD and RSI support selling bias today; therefore, we will be looking to enter a selling trade below 104.24 today as a violation of this level has high odds of leading the USD/JPY pair further lower towards the 103.900 level. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Oct 29 – Bitcoin Back At $13,000: What’s Next? Trading Ideas and Market Overview

The cryptocurrency sector quite a bad day, as Bitcoin led the rest of the sector down by dropping from $13,900 all the way to below $13,000. Bitcoin is currently trading for $13,240, representing a decrease of 3.70% on the day. Meanwhile, Ethereum lost 3.60% on the day, while XRP lost 2.93%.

The cryptocurrency sector quite a bad day, as Bitcoin led the rest of the sector down by dropping from $13,900 all the way to below $13,000. Bitcoin is currently trading for $13,240, representing a decrease of 3.70% on the day. Meanwhile, Ethereum lost 3.60% on the day, while XRP lost 2.93%.

The cryptocurrency sector quite a bad day, as Bitcoin led the rest of the sector down by dropping from $13,900 all the way to below $13,000. Bitcoin is currently trading for $13,240, representing a decrease of 3.70% on the day. Meanwhile, Ethereum lost 3.60% on the day, while XRP lost 2.93%.

 Daily Crypto Sector Heat Map

If we check out the top 100 cryptocurrencies, Ocean Protocol gained 11.69% in the past 24 hours, making it the crypto to gain the most in a day. Nexo (7.86%) and DigiByte (4.49%) also did great. On the other hand, ABBC Coin lost 12.3%, making it the most prominent daily loser. It is followed by Band Protocol’s loss of 11.46% and Quant’s loss of 11.36%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

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

Daily Crypto Market Cap Chart

The crypto sector capitalization has decreased significantly in the past 24 hours. Its current value is $393.05 billion, representing a $15.07 billion decrease compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization pulled back as its price couldn’t pass the crucial resistance of $13,900. The move was strong and lasted three candles (around 12 hours), over which Bitcoin fell as low as $12,895, where it bounced off of its 50-period moving average. Bitcoin is now consolidating above the $13,180 level.

Traders should look at how Bitcoin trades within the range bound by $13,180 and $13,570 and trade off of that.

BTC/USD 4-hour Chart

Bitcoin’s 4-hour, daily, and monthly technicals are looking almost identical, with all of them being tilted towards the buy-side, with a bit of neutrality sprinkled in. On the other hand, its weekly overview is a bit more bearish, with oscillators leaning towards the sell-side.

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 (52.27)
  • Volume is descending
Key levels to the upside          Key levels to the downside

1: $13,570                                 1: $13,180

2: $13,900                                 2: $12,870

3: $14,000                                  3: $12,500

Ethereum

Ethereum has followed Bitcoin to the downside, ultimately following its own predicted path within an ascending channel and reaching the bottom of $380 (as predicted in our previous articles) before bouncing back. It is currently trading slightly below $400, with a good chance of retesting this level once again.

Traders should watch for how Ethereum looks to retest the $400 resistance level and trade the pullback or the spike after that.

ETH/USD 4-hour Chart

Ethereum’s daily and monthly technicals are tilted towards the buy-side (with slight neutrality next to them). However, its shorter time-frame (the 4-hour overview) looks completely bearishness, while its weekly overview is completely neutral.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is below its 50-period and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (42.03)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $400                                     1: $378

2: $415                                     2: $371

3: $420                                      3: $361

Ripple

The fourth-largest cryptocurrency by market cap managed to push above the ascending dotted yellow line (as predicted in our previous articles) but quickly failed as Bitcoin was dragging the market down. XRP followed and fell to its $0.2454 support level, which is holding for now. However, XRP is still quite close to the support level, which might break at any moment.

Traders should look for an entry if XRP breaks $0.2454 to the downside. When looking at trades to the upside, traders can look at Bitcoin’s upside pushes and trade off of that.

XRP/USD 4-hour Chart

XRP’s technicals are almost uniformed in how bearish they are, with its 4-hour, daily, and monthly overviews showing a slight tilt towards the sell-side. Its weekly overview, however, is completely neutral.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price far below both its 50-period EMA and its 21-period EMA
  • Price is slightly above its bottom Bollinger band
  • RSI is neutral (38.72)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $0.26                                     1: $0.2454

2: $0.266                                   2: $0.235

3: $0.2855                                3: $0.227

 

Categories
Forex Fundamental Analysis

Everything You Should Know About ‘Home Loans’ Macro Economic Indicator

Introduction

Introduction

Introduction

The real estate market has always been an integral part of the economy – any economy. Where the real estate sector flourishes, economic development follows. It can be argued that entire economies, from the pre-renaissance period, have been built on the back of a thriving real estate. The strategic economic importance of the real estate market is that, where houses are built, other infrastructure developments follow, social amenities, and market places. In the current age, the flourishing of the real estate sector can be taken as a leading indicator of household demand; and this is why monitoring home loans is essential.

Understanding Home Loans

A home loan is also known as an owner-occupier home loan. These loans are given to people who fully own their current home outright or have a mortgage on their existing primary residence. The home loans are usually meant to either fund the purchase of a second home or conduct renovations and improvements on the current home.

Therefore, home loans can be categorized into two; home equity loan or a mortgage.

Home mortgage: In this type of home loan, a financial institution lends money to an existing homeowner to fund the purchase of another home or to make renovations on the existing one. In this case, you transfer the deed on your current house to the banks, which is used as collateral. The financial institution can fund up to 80% of the value of your home. i.e., if your home is worth $100000, you can receive up to $80000 in the loan. Note that you will only get this type of mortgage if you outright own the home. In case you have an existing mortgage, you can opt for a home equity loan.

Home equity loan: If a mortgage funded your primary residence, you could take a second mortgage if you have enough equity on the current home. Whenever you pay down the first mortgage on your home, the value of your home equity increases. Let’s say your current home is worth $300,000, and you have an outstanding mortgage worth $100,000; this means you have equity of $200,000. Here, the equity represents the value you will remain with if you were to sell the home. Therefore, when you take a home equity loan, you will receive a lump sum amount equivalent to the equity you have on your current home.

In both types of home loans, your primary residence is the collateral. The lender is entitled to foreclose on these homes if you default on the repayment.

Using Home Loans for Analysis

As a significant indicator in the real estate market, home loans data can be used as an indicator of the overall demand in the economy. Let’s take an example of an increase in home loans.

When home loans are growing, it can be taken to mean that households have increased demand in the real estate market. Home loans are primarily used to conduct renovations on existing homes or fund the purchase of second homes. Since both these activities are not essential needs for a household, an increase in home loans can only mean that households have satisfactorily taken care of their primary and intermediate needs. Therefore, the welfare of households can be said to be improving when home loans are increasing.

Furthermore, since one is required to make a predetermined repayment on home loans or risk foreclosure, it would imply that households have a steady stream of income when they take these loans. On a macroeconomic level, an increase in the home loans would imply that unemployment levels are down or that households receive higher wages. Lower levels of unemployment and increased wages tend to increase disposable income.

In such cases, an increase in aggregate demand is expected hence overall economic growth. Note that in most economies, households’ demand for goods and services account for almost 70% of the GDP. Therefore, an increase in the demand for houses implies that almost every other sector has also experienced increased demand. These sectors range from those providing essential to intermediate goods and services to households.

The home loans data can also be used to show the economic cycles recessions to recoveries. If the economy has gone through a period of recession, an increase in home loans can sign that money is flowing through the economy. Low economic activities characterize the economic cycles of recessions and depressions; therefore, an increase in home loans can be taken as a sign of increased economic activities. This increase can be an indicator that the economy is going through periods of recovery.

Source: ABC News Australia

Impact on currency

The forex market is forward-looking. This attribute means that for every economic indicator released, the forex market tends to anticipate how these indicators would influence the future interest rate.

When home loans are increasing, it could mean two things. Either household has access to cheaper financing, or the economic growth has increased the flow of money. In the forex market, a continuous increase in home loans can be seen as a potential trigger for contractionary monetary policies like increasing the interest rate. Such policies result in the appreciation of the currency relative to others.

Conversely, a continuous drop in the home loans leads to depreciation of the currency relative to others. In this case, governments and central banks could view the drop in home loans as a sign of the economy slowing down. Expansionary monetary and fiscal policies could be implemented to prevent the economy from going into recession.

Sources of Data

In Australia, the Australian Bureau of Statistics (ABS) is responsible for the publication of the home loans data. Trading Economics has a historical review of the Australian home loans and a global comparison with other countries.

How Home Loans Data Release Affects the Forex Price Charts

The latest publication of the home loans data by the ABS was on October 9, 2020, at 1.30 AM GMT. The release can be accessed at Investing.com. From the screengrab below, the AUD’s moderate volatility should be expected when the home loans data is released.

The home loans MoM change for August 2020 was 13.6%, an increase from 10.7% in July 2020.

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

AUD/JPY: Before Home Loans Data Release on October 17, 2020, 
Just Before 1.30 AM GMT

The AUD/JPY pair was trading a mild downtrend before the release of the Australian home loans data. From the above 5-minute chart, the 20-period MA is slightly falling with candles forming just below it.

AUD/JPY: After Home Loans Data Release on October 17, 2020, at 1.30 AM GMT

The pair formed a 5-minute inverted bearish ‘hammer’ candles immediately after releasing the home loans data. Subsequently, the AUD/JPY adopted a subdued bullish trend as the 20-period MA began rising, and the candles crossing over it. As expected, this trend showed that the AUD became stronger after the increase in home loans.

Bottom Line

From the above analyses, we can conclude that although the home loans data is a moderate-impact economic indicator, it significantly impacts the forex price charts. This indicator’s impact can be said to have been amplified since it signals the rebounding of the real estate sector from the coronavirus-induced recessions.

Categories
Forex Signals

USD/JPY Takes Dip Amid Downward Channel – Brace for Selling! 

During the Europen session, the USD/JPY continues trading lower amid a downward channel at 102.298 level. The USD/JPY pair moved in a bearish direction and posted big losses on Tuesday. The USD/JPY pair was down on Tuesday amid the broad-based U.S. dollar weakness along with the rising risk-averse market sentiment on the back of fresh tensions between the U.S. and China. The safe-haven appeal was also supported by the rising number of coronavirus cases and lockdowns that drove the stock market on the downside and weighed on the USD/JPY pair as well.

During the Europen session, the USD/JPY continues trading lower amid a downward channel at 102.298 level. The USD/JPY pair moved in a bearish direction and posted big losses on Tuesday. The USD/JPY pair was down on Tuesday amid the broad-based U.S. dollar weakness along with the rising risk-averse market sentiment on the back of fresh tensions between the U.S. and China. The safe-haven appeal was also supported by the rising number of coronavirus cases and lockdowns that drove the stock market on the downside and weighed on the USD/JPY pair as well.

During the Europen session, the USD/JPY continues trading lower amid a downward channel at 102.298 level. The USD/JPY pair moved in a bearish direction and posted big losses on Tuesday. The USD/JPY pair was down on Tuesday amid the broad-based U.S. dollar weakness along with the rising risk-averse market sentiment on the back of fresh tensions between the U.S. and China. The safe-haven appeal was also supported by the rising number of coronavirus cases and lockdowns that drove the stock market on the downside and weighed on the USD/JPY pair as well.

The U.S. Dollar Index that measures the value of the greenback against the basket of six currencies dropped by 0.3% to 92.8 level on Tuesday that weighed on the U.S. dollar and dragged the USD/JPY pair prices.

On the coronavirus front, the United States, Russia, France, Italy, Netherland, Spain, and many other nations across the globe set a new record for the number of daily coronavirus cases. The U.S. reported more than 74,300 new cases in a single day, France reported more than 52,000 daily cases over the weekend. The global record for the infections was recorded as 43.4 million on Tuesday by the Johns Hopkins University.

The rising number of coronavirus cases urged governments to re-impose lockdown measures to curb the virus’s spread. These lockdowns in a situation where economies were still under recovery phase from the previous lockdown effects raised a high appeal for the safe-haven market sentiment in the market. The risk-averse sentiment supported the safe-haven Japanese Yen that ultimately weighed on the USD/JPY pair on Tuesday.

Meanwhile, on the data front, at 09:59 GMT, the BOJ Core CPI for the year dropped to -0.1% from the forecasted 0.0% and weighed on the Japanese Yen that failed to reverse the negative movement of the USD/JPY pair. At 18:00 GMT, August’s Housing Price Index rose to 1.5% from the anticipated 0.7% and supported the U.S. dollar. The S&P/CS Composite-20 HPI for the year also advanced to 5.2% from the projected 4.2% and supported the U.S. dollar. At 18:59 GMT, the Richmond Manufacturing Index for October raised to 29 against the expected 18 and supported the U.S. dollar but failed to impress investors; thus, the USD/JPY pair continued moving in the downward momentum on Tuesday.

However, at 19:00 GMT, the C.B. Consumer Confidence for October was dropped to 100.9 from the anticipated 102.1 and weighed on the U.S. dollar that added further pressure on the USD/JPY pair. The U.S. dollar failed to cheer the positive macroeconomic data on Tuesday because of the stalled talks for the next round of the U.S. stimulus package. The stalemate between the White House and the House of Representative Speaker Nancy Pelosi over the U.S. stimulus aid package’s size led to delayed talks till November 3rd election results and weighed on the U.S. dollar.

The USD/JPY continues to extend its bearish momentum as the pair trades at the 104.298 level. On the 4 hour timeframe, the USD/JPY has formed a downward channel that’s driving bearish movement in the market, and it may support the pair around 104.300 and 104.007 area. Conversely, the continuation of an upward movement is likely to drive the buying trend until the 104.778 level. Check out the sell setup below…


Categories
Forex Market Analysis

Daily F.X. Analysis, October 28 – Top Trade Setups In Forex – Bank of Canada Policy! 

On the news front, the Bank of Canada Overnight Rate rate and Rate Statement will be in focus, and it may drive some price action in Canadian pairs. Elsewhere, we don’t have any major event that can drive sharp movements in the U.S. dollar related pairs. Let’s focus on technical levels.

On the news front, the Bank of Canada Overnight Rate rate and Rate Statement will be in focus, and it may drive some price action in Canadian pairs. Elsewhere, we don’t have any major event that can drive sharp movements in the U.S. dollar related pairs. Let’s focus on technical levels.

On the news front, the Bank of Canada Overnight Rate rate and Rate Statement will be in focus, and it may drive some price action in Canadian pairs. Elsewhere, we don’t have any major event that can drive sharp movements in the U.S. dollar related pairs. Let’s focus on technical levels.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.17872 after placing a high of 1.18385 and a low of 1.17821. The EUR/USD pair moved lower and posted losses on Tuesday to extend the previous bearish trend. The EUR/USD pair extended its losses on Tuesday and fell for 2nd consecutive day despite the broad-based U.S. dollar weakness. The decline in the EUR/USD pair was due to the rising number of coronavirus cases and the increased numbers of lockdown in European nations to curb the COVID-19 crisis’s effects.

The EUR/USD pair moved in upward momentum during the first half of Tuesday and recovered most of its previous daily losses on the back of broad-based U.S. dollar weakness. The U.S. Dollar Index was down to 92.8 level by 0.3% on Tuesday as the uncertainty over the next round of U.S. stimulus package and the upcoming U.S. Presidential election weighed on the greenback.

The risk-averse market sentiment emerged in the market due to an increased number of coronavirus cases worldwide, especially in the European nations. The United States reported more than 74,300 new coronavirus cases on Monday that pushed the country’s daily average over the past week above 71,000. Meanwhile, in Europe, France prepared for a fresh lockdown as new daily confirmed coronavirus cases hit the highest ever at above 52,000 on a single day.

Italy and the Netherlands also reported a new record high of cases over the weekend. Spain declared a national emergency and imposed a night-time curfew for six months. All these reports from across the globe weighed on risk sentiment and dragged the riskier asset like EUR/USD pair on the downside. Meanwhile, the risk sentiment was further affected by the latest news from one of the vaccine developers, Pfizer, that said that getting early results by October for coronavirus vaccine shots would be nearly impossible. These comments added further to the downside momentum of EUR.USD pair on Tuesday.

On the data front, at 13:00 GMT, the Spanish Unemployment Rate for September raised to 16.3% against the forecasted 16.0% and weighed on the single currency Euro that added further to the losses of EUR/USD pair. At 14:00 GMT, the M3 Money Supply for the year was advanced to 10.4% from the forecasted 9.6% and supported Euro currency. The Private Loans for the year from Eurozone remained flat at 3.1%.

At 18:00 GMT, August’s Housing Price Index raised to 1.5% from the projected 0.7% and supported the U.S. dollar. The S&P/CS Composite-20 HPI for the year also elevated to 5.2% from the projected 4.2% and supported the U.S. dollar. At 18:59 GMT, the Richmond Manufacturing Index for October surged to 29 from the anticipated 18 and supported the U.S. dollar added in the additional losses in EUR/USD pair on Tuesday.

However, at 19:00 GMT, the C.B. Consumer Confidence for October dropped to 100.9 from the projected 102.1 and weighed on the U.S. dollar that capped further losses in EUR/USD prices on Tuesday. Furthermore, the risk sentiment was deteriorated by the latest tensions between the U.S. & China over the potential sales of American made missiles to Taiwan. This raised the market’s safe-haven appeal and weighed on the riskier EUR/USD pair for the day.

Daily Technical Levels

Support Resistance

1.1787     1.1845

1.1766     1.1882

1.1729     1.1904

Pivot point: 1.1824

EUR/USD– Trading Tip

The EUR/USD traded with a bearish bias, falling from the 1.1800 level to test the support area of the 1.1770 mark. Violation of the 1.1770 level can drive further selling until the 1.1733 support level, which is extended by an upward trendline. However, the MACD and RSI are supporting selling bias; therefore, the EUR/USD may exhibit a selling trend below an intraday pivot point level of 1.1824 level. Buying can be seen over the 1.1700 level today. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30414 after placing a high of 1.30793 and a low of 1.30007. The GBP/USD pair reversed on Tuesday and started moving in a bullish track. The GBP/USD pair rose and broke it’s 4 days bearish streak on Tuesday amid the broad-based U.S. dollar weakness and the rising optimism surrounding the Brexit process. The U.S. dollar was weak across the board amid the fallen U.S. yields and rising concerns over the U.S. stimulus package and upcoming U.S. election.

The U.S. dollar also failed to cheer the positive macroeconomic figures from the economic docket on Tuesday as investors’ focus shifted towards other developments. The Wall Street stocks were mixed during the day as the resurgence in COVID-19 cases was creating concerns among the market participants. The market’s risk sentiment was also affected by the latest dispute between the U.S. & China, along with the increased number of coronavirus cases and the slowdown of economies throughout the globe. The deteriorated risk sentiment weighed heavily on the risk perceived British Pound and GBP/USD pair gains remained limited for the day.

The British investors were more focused on the Brexit process’s optimism as the Chief EU negotiator Michel Barnier extended his stay in London for ongoing talks. This raised the hopes that both parties will soon reach a consensus over the Brexit-deal key points as the negotiations were extended. The silence around the talks matter was seen as a positive sign between the investors, and they started buying British Pound against the U.S. dollar.

Meanwhile, the PM Boris Johnson has also said that he was not waiting for the U.S. elections to deal with the E.U. He added that resolving the issues of state aid and fisheries was more critical at the time, and the markets started moving on the positive side for British Pound as U.K. was eager to strike a deal with the E.U.

On the data front, at 16:00 GMT, the CBI Realized Sales for October came in as -23 against the expectations of -1 and weighed on British Pound and capped further gains in GBP/USD pair. At 18:00 GMT, the Housing Price Index for August surged to 1.5% from the expectations of 0.7% and supported the U.S. dollar. The S&P/CS Composite-20 HPI for the year also surged to 5.2% from the forecasted 4.2% and helped the U.S. dollar. At 18:59 GMT, the Richmond Manufacturing Index for October raised to 29 against the expectations of 18 and supported the U.S. dollar that limited further gains in GBP/USD prices.

However, at 19:00 GMT, the C.B. Consumer Confidence for October fell to 100.9 from the expected 102.1 and weighed on the U.S. dollar that pushed the GBP/USD pair further on the upside. As for the U.S. Presidential elections, the uncertainty surrounding the question that who will win the election kept the U.S. dollar weak across the board on Tuesday. Some polls were suggesting a blue wave while others were in favor of re-electing president Donald Trump. Along with the stalled talks for the next round of the U.S. stimulus package before November 3, these uncertainties weighed on the U.S. dollar and supported the GBP/USD pair’s gains on Tuesday.

Daily Technical Levels

Support Resistance

1.2985     1.3067

1.2947     1.3113

1.2902     1.3150

Pivot point: 1.3030

GBP/USD– Trading Tip

The GBP/USD is trading sideways, holding within a symmetric triangle pattern extending neutral with a narrow trading range of 1.3071 – 1.3007 level. Violation of 1.3007 level can open additional room for selling until the 1.2965 area, which extends support due to an upward trendline on the 4-hour timeframe. The MACD and RSI are in support of selling bias today. Consider opening sell trades below the 1.3075 level today. On the other hand, the violation of 1.3071 can drive upward movement until the 1.3165 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.475 after placing a high of 104.888 and a low of 104.386. The USD/JPY pair moved in a bearish direction and posted big losses on Tuesday. The USD/JPY pair was down on Tuesday amid the broad-based U.S. dollar weakness along with the rising risk-averse market sentiment on the back of fresh tensions between the U.S. and China. The safe-haven appeal was also supported by the rising number of coronavirus cases and lockdowns that drove the stock market on the downside and weighed on the USD/JPY pair as well.

The U.S. Dollar Index that measures the value of the greenback against the basket of six currencies dropped by 0.3% to 92.8 level on Tuesday that weighed on the U.S. dollar and dragged the USD/JPY pair prices.

On the coronavirus front, the United States, Russia, France, Italy, Netherland, Spain, and many other nations across the globe set a new record for the number of daily coronavirus cases. The U.S. reported more than 74,300 new cases in a single day, France reported more than 52,000 daily cases over the weekend. The global record for the infections was recorded as 43.4 million on Tuesday by the Johns Hopkins University.

The rising number of coronavirus cases also urged governments to re-impose lockdown measures to curb the virus’s spread. These lockdowns in a situation where economies were still under recovery phase from the previous lockdown effects raised a high appeal for the safe-haven market sentiment in the market. The risk-averse sentiment supported the safe-haven Japanese Yen that ultimately weighed on the USD/JPY pair on Tuesday.

Meanwhile, on the data front, at 09:59 GMT, the BOJ Core CPI for the year dropped to -0.1% from the forecasted 0.0% and weighed on the Japanese Yen that failed to reverse the negative movement of the USD/JPY pair. At 18:00 GMT, August’s Housing Price Index rose to 1.5% from the anticipated 0.7% and supported the U.S. dollar. The S&P/CS Composite-20 HPI for the year also advanced to 5.2% from the projected 4.2% and supported the U.S. dollar. At 18:59 GMT, the Richmond Manufacturing Index for October raised to 29 against the expected 18 and supported the U.S. dollar but failed to impress investors; thus, the USD/JPY pair continued moving in the downward momentum on Tuesday.

However, at 19:00 GMT, the C.B. Consumer Confidence for October was dropped to 100.9 from the anticipated 102.1 and weighed on the U.S. dollar that added further pressure on the USD/JPY pair. The U.S. dollar failed to cheer the positive macroeconomic data on Tuesday because of the stalled talks for the next round of the U.S. stimulus package. The stalemate between the White House and the House of Representative Speaker Nancy Pelosi over the U.S. stimulus aid package’s size led to delayed talks till November 3rd election results and weighed on the U.S. dollar.

Furthermore, the Biden victory bets were started to weigh on the U.S. dollar as the polls suggested a blue wave in the upcoming Presidential elections. The weak U.S. dollar on Tuesday caused the USD/JPY pair to move on the downside. Moreover, the U.S. and China tensions came on-board after a long pause on Tuesday when news suggested a potential $2.4 billion sale of U.S. anti-ship missiles to Taiwan. In response to this news, China slapped sanctions on U.S. companies over national security interests. These fresh tensions between the U.S. and China raised safe-haven appeal and supported the safe-haven Japanese Yen that ultimately added weight on the USD/JPY pair on Tuesday.

Daily Technical Levels

Support Resistance

104.18     105.35

103.68     106.00

103.02     106.51

Pivot point: 104.84

USD/JPY – Trading Tips

The USD/JPY continues to extend its bearish momentum as the pair trades at the 104.298 level. On the 4 hour timeframe, the USD/JPY has formed a downward channel that’s driving bearish movement in the market, and it may support the pair around 104.300 and 104.007 area. Conversely, the continuation of an upward movement is likely to drive the buying trend until the 104.778 level. The MACD and RSI are supporting selling bias today; therefore, we will be looking to enter a selling trade below 104.84 today. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Oct 28 – Bitcoin Rushing Towards $14,000; Over 50% of US Investors Interested in Crypto

The cryptocurrency sector had a great day, with most cryptocurrencies ending up in the green due to Bitcoin pushing towards $13,900. Bitcoin is currently trading for $13.720, representing an increase of 4.81% on the day. Meanwhile, Ethereum gained 3.63% on the day, while XRP gained 1.61%.

The cryptocurrency sector had a great day, with most cryptocurrencies ending up in the green due to Bitcoin pushing towards $13,900. Bitcoin is currently trading for $13.720, representing an increase of 4.81% on the day. Meanwhile, Ethereum gained 3.63% on the day, while XRP gained 1.61%.

The cryptocurrency sector had a great day, with most cryptocurrencies ending up in the green due to Bitcoin pushing towards $13,900. Bitcoin is currently trading for $13.720, representing an increase of 4.81% on the day. Meanwhile, Ethereum gained 3.63% on the day, while XRP gained 1.61%.

 Daily Crypto Sector Heat Map

If we check out the top 100 cryptocurrencies, Flexacoin had another amazing day, gaining an astonishing 332.35% in the past 24 hours, making it the crypto to gain the most in a day. Nexo (13.94%) and Compound (13.71%) also did great. On the other hand, ABBC Coin lost 13.58%, making it the most prominent daily loser. It is followed by Reserve CyberVein’s loss of 10.32% and Quant’s loss of 7.90%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance level had increased quite a bit since we last reported, with its value is currently 62.4%. This value represents a 0.8% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased significantly since we last reported. Its current value is $408.12 billion, representing an increase of $13.35 billion compared to our previous report.

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What happened in the past 24 hours?

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Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization surprised the market once again by pushing even further up. Our weekly chart overview has listed a push towards $13,900 as one of the likely scenarios for this week, which is exactly what happened. Bitcoin has pushed past the descending (yellow dotted) line and above the $13,180 resistance level, all the way to $13,800.

Traders should look at how Bitcoin behaves around $13,900 and follow the next push (either a pullback below $13,570 or a break past $13,900).

BTC/USD 4-hour Chart

Bitcoin’s technicals have changed to extremely bullish on all time frames since yesterday, with only the 4-hour chart oscillators showing some signs of a tilt towards the sell-side.

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 at its top Bollinger band
  • RSI is overbought (74.76)
  • Volume is above average
Key levels to the upside          Key levels to the downside

1: $13,570                                 1: $13,200

2: $13,900                                 2: $12,870

3: $14,000                                  3: $12,500

Ethereum

Ethereum has spent the day bouncing off of the support level dating back from early September. While Ether had a slightly bigger chance of continuing its path down the projected path towards the bottom of the channel, Bitcoin’s rise sparked up Ether’s bounce. Its price is now hovering slightly above $400, with a solid chance of testing $415 again.

Traders should watch for how Ethereum plays out in the next few days to evaluate if it pushes towards $415-$420 or goes below $400.

ETH/USD 4-hour Chart

Ethereum’s technicals are tilted towards the buy-side on all time-frames, but only the daily time-frame is completely bullish. On the other hand, the 4-hour, weekly, and monthly overviews have signs of neutrality, mostly when it comes to oscillators.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is above its 50-period and slightly above its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (55.78)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $415                                     1: $400

2: $420                                     2: $378

3: $435                                      3: $371

Ripple

The fourth-largest cryptocurrency by market cap has stayed at the same place over the course of the past 24 hours, possibly preparing itself for a move towards the yellow ascending line. Even if it keeps following it, XRP will gain a significant boost in price and an opportunity to test $0.26 once again.

Traders should look for a trade when XRP reaches $0.26, as they can enter a trade on either the pullback or the push above.

XRP/USD 4-hour Chart

XRP’s technicals are slightly tilted towards the buy-side, but the 1-day, as well as 4-hour and weekly technicals, show slight neutrality. On the other hand, its monthly overview is still bearish.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price at both its 50-period EMA and its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (50.04)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $0.26                                     1: $0.2454

2: $0.266                                   2: $0.235

3: $0.2855                                3: $0.227

 

Categories
Forex Videos

Fundamental Analysis For Novices – Foreign Investment In Japanese Stocks

https://youtu.be/7zfho2ZQz9k

https://youtu.be/7zfho2ZQz9k

 

Fundamental analysis for novices: Foreign investment in Japanese stocks

 

Thank you for joining this forex academy educational video. In this session, we will be looking at foreign investment in Japanese stocks.

If you are serious about trading, you must be responsible for knowing what factors are likely to influence the movements of exchange rates in the forex market. One of the biggest movers is the release of fundamental economic data, which is collated, released, and usually subject to an embargo by governments or professional economic statistician specialist firms.
Luckily for us traders, most of this information can be found on economic calendars, which are readily available by most brokers.

Keeping up to date with economic calendar events is just as important as placing the trades. Because if you are unaware of a high impact data release that might fall shortly after you place your trade, it could potentially have a negative impact and incur losses. Therefore, get into the habit of looking at your economic calendar every day and look out for what high impact data may be released in the following few days ahead. Most institutional traders will take a long-term approach based on data that may be released at these future times.
The most critical components of an economic calendar are the day and date, the time of the release, the type of event, the likely impact, which usually is measured as low, medium, and high impact, with the latter potentially causing extreme market volatility. The actual data will be populated on the calendar shortly after the embargoed release. And this can be compared to the previous data. Whether that is on a weekly, monthly, quarterly, or annual basis, and where typically there will be a consensus as to the actual data, which will have been put together by economic forecasters.

Here we can see that on Thursday, September 3rd, at 12:50 a.m. BST Japan issued its economic data release for investment in Japan stocks to August 28th and where this was a low impact event. There was no consensus, but we can see the actual and previous statistics based on yen amounts. The data was released by the Japanese Ministry of Finance. The data refers to the difference between investments in the Japanese stock market by foreign entities, and the ‘actual’ data on the calendar refers to the net difference between the inflow and outflow of those investments.
Although this is a low impact event, the balance between inflow and outflow of funds gives an indication of the strength of the economy and, more importantly, shows that overseas firms such as pension funds, government funds, hedge funds, and investors see value in investing.
Traders should be looking for a higher capital inflow if they want to be buying yen and a lower capital inflow to support trading setups for selling the yen against counterpart currencies, especially the US dollar.

Categories
Forex Fundamental Analysis

Everything You Should Know About ‘Job Cuts’ As A Forex Fundamental Indicator

Introduction

Introduction

Introduction

The labor market plays play a crucial role in determining the strength of the economy. Perhaps one of the most closely watched fundamental economic indicator is the unemployment rate since it is one of the leading indicators of demand. The growth of any economy is entirely dependent on the forces of demand and supply. Entire industries have been built by surging demand and crippled by lack of it.

Understanding Job Cuts

Job cuts represent the number of corporate employees who have been laid off over a given period. The job cuts report shows the national number of people who were laid off. This number is further broken down by industry, ranking those with the most job cuts to the least. The job cuts are compared monthly, quarter-on-quarter, yearly, and year-to-date. The report goes further to include the hiring plans announced by the various sectors, thus showing the potential number of job vacancies.

Therefore, we notice that the job cuts report serves to show job losses and future openings. Thus, it is a powerful indicator in the labor market and the economy since it can be used to predict whether recessions are coming, the state of economic recovery, and show the sentiment about the economy from employers’ perspective.

Using Job Cuts Report for Analysis

As an indicator of economic health, job cuts can signal the following.

An increasing number of job cuts is a precursor to higher unemployment levels and signals a shrinking economy. It is considered a leading indicator of unemployment. With more and more people losing their jobs, households’ disposable income will be on a decline. Consequently, the aggregate demand in the economy will decline, and with it, the aggregate supply. These declines imply that producers are scaling down their operations, matching the lowering demand to avoid market price distortion.

Source: St. Louis FRED

Since the job cuts report is categorized by industry, it serves to show which sectors of the economy are performing poorly. Job cuts are a result of the general challenging operating environment. It shows that companies are attempting to reduce operating costs as a result of a decline in demand. With this report, we can analyze which sectors are hard hit by tough economic times and which sectors are resilient. For investors, this analysis is instrumental in deciding which sector to invest in. the report can also be used to show which industries are worse affected by economic recessions.

It will be useful for policymakers to implement sector-specific policies to help cushion the labor market in the future. The job cuts report can be used to establish which economic sectors are susceptible to business cycles by analyzing which sectors have the most cuts in times of recessions. During a recession, the aggregate demand is falling, and when the economy is recovering, the aggregate demand increases. Thus, it is expected for job cuts to reduce in time of recovery and economic expansion.

Similarly, investors can use historical figures to help pinpoint the peak and trough levels of the business cycle. Typically, the economy has the most job cuts when the recession is at its worst. This point can be considered the trough – and it precedes a recovery. Here would be the optimal point of investing for investors who would want to capitalize on the effects of recovery. When the economic recovery is at its peak and unemployment levels are their lowest, it signifies that the economy might overheat.

Source: St. Louis FRED

Together with the analysis of business cycles, the job cuts report can provide a clear picture of the number of temporary workers in the labor market. It goes to reason that in times of recovery, businesses tend to hire more workers. However, businesses most impacted by the economic cycles would opt to engage temporary labor instead. In times of recession, most of these jobs are lost. Therefore, the job cuts report can be used to identify which industries hire the most temporary workers.

Job cuts could also be a result of automation, not entirely because of a decrease in the aggregate demand. It is worth noting that the automation of business processes results in improved efficiency, higher output, and possibly higher quality of goods and services. While all these might be good for the businesses and possibly the economy, the effects of the jobs lost will still be reflected in the economy.

Impact on Currency

When analyzing the labor market, most forex traders concentrate their attention on the employment report. However, job cuts report is released ahead of the employment situation report; it can provide leading insights. Here are some of the ways job cuts can impact the forex market. The job cuts are used to forestall recessions and recoveries.

When the job cuts are increasing, it signals that the aggregate demand in the economy will decline. Businesses scaling down operations implies low investor confidence in the economy, which could mean there is a net outflow of capital. Increasing unemployment levels, a shrinking economy, and more households relying on the government social security programs signal a recession. Expansionary fiscal and monetary policies will be implemented. One such policy includes lowering interest rates, which make the currency depreciate relative to others.

A reduction in the job cuts signals economic recovery, making the currency increase in value relative to others. When job cuts are steadily reducing, businesses are retaining more of their employees as time goes by. This retention is a sign of improving economic fundamentals.

Sources of Data

Challenger, Gray & Christmas publishes the US job cuts data. Challenger, Gray & Christmas is a global outplacement and career transitioning firm. Comprehensive historical coverage of the US job cuts is accessed at Trading Economics.

How Job Cuts Data Release Affects Forex Price Charts?

The most recent release of the US Challenger job cuts was on October 1, 2020, at 7.30 AM ET and accessed at Investing.com. The screengrab below is of the monthly Challenger job cuts.

Low volatility is to be expected when the job cuts report is released.

In September 2020, the number of US job cuts was 118.804K compared to 115.762K in August. In terms of the YoY change, the September job cuts represented a 185.9% change compared to a 116.5% change in August.

Now, let’s see how this release made an impact on the Forex price charts.

EUR/USD: Before the Challenger Job Cuts Release on October 1, 2020, 
Just Before 7.30 AM ET

Before the new release, the EUR/USD pair was trading in a general uptrend. As shown in the above 5-minute chart, the candles were forming above a rising 20-period MA.

EUR/USD: After the Challenger Job Cuts Release on October 1, 2020, 
at 7.30 AM ET

After the US job cuts report release, the pair formed a bullish 5-minute candle as expected, due to the weakening of the USD. Subsequently, the pair continued trading in a subdued uptrend with the 20-period MA flattening.

Bottom Line

The job cuts report plays a vital role in the economy, especially now, by showing the state of economic recovery from the coronavirus-induced recession. However, in the forex market, the job cuts report is a low-impact indicator since most traders and analysts pay the most attention to the employment situation report. The low impact nature can be seen as the release of the Challenger job cuts report failed to advance the bullish momentum of the EUR/USD pair.

Categories
Forex Signals

AUD/CAD Breaking Below Upward Channel – Is there a Sell Trade?

The USD/CAD extended its previous session bullish bias and hit the session high around above 0.9416 level. However, the bullish sentiment around the currency pair was being supported by a modest pickup in the ongoing drop in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie. Hence, the broad-based U.S. dollar managed to gain some positive traction on the day amid growing market worries about surging coronavirus cases in Europe and the United States, which keeps the market trading sentiment under pressure and undermined the greenback. 

The USD/CAD extended its previous session bullish bias and hit the session high around above 0.9416 level. However, the bullish sentiment around the currency pair was being supported by a modest pickup in the ongoing drop in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie. Hence, the broad-based U.S. dollar managed to gain some positive traction on the day amid growing market worries about surging coronavirus cases in Europe and the United States, which keeps the market trading sentiment under pressure and undermined the greenback. 

The USD/CAD extended its previous session bullish bias and hit the session high around above 0.9416 level. However, the bullish sentiment around the currency pair was being supported by a modest pickup in the ongoing drop in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie. Hence, the broad-based U.S. dollar managed to gain some positive traction on the day amid growing market worries about surging coronavirus cases in Europe and the United States, which keeps the market trading sentiment under pressure and undermined the greenback. 

In addition to this, the long-lasting impasse over the next round of the U.S. fiscal stimulus measures added further burden on investors’ sentiment and benefitted the USD’s status as the global reserve currency. Across the pond, the reason for the currency pair bullish bias could also be attributed to the weaker crude oil prices, which undermined the demand for the commodity-linked currency the loonie and contributed to the currency pair gains. As of writing, the AUD/CAD currency pair is currently trading at 0.9396 and consolidating in the range between 0.9416 – 9330.

Despite the optimism over a potential treatment/vaccine for the highly infectious virus, the market risk sentiment remains depressive with Wall Street hugging the sellers and S&P 500 Futures flashing losses amid a combination of factors. Be it the worrisome headlines concerning Brexit or the tension between the US-China, not to forget the coronavirus issues, the market trading sentiment has been flashing red since the week started, which ultimately keeps the safe-haven assets supportive on the day. 

At the coronavirus front, the prevalent worries over the resurgence of the coronavirus pandemic raised fears of global economic recovery, which keeps the market trading sentiment under pressure. The coronavirus COVID-19 cases continue to climb in Europe, U.K., and the U.S. As per the latest report, the U.S. has witnessed its highest ever number of new COVID-19 cases over the weekend, while France is also reporting new case records and Spain announced a state of emergency. As in result, the imposition of stricter lockdown measures to stop the second wave of COVID-19 cases, along with receding hopes for a pre-election fiscal deal also weighed on market trading sentiment.

This, in turn, the broad-based U.S. dollar succeeded to extend its early-day gains and remained well bid on the day as investors turned to the safe-haven in the wake of risk-off market sentiment. However, the gains in the greenback could be temporary due to the worries that the economic recovery in the U.S. could be stopped because of the reappearance of coronavirus cases. Besides this, the gains in the U.S. dollar were further boosted by a lack of progress toward a U.S. stimulus package, which puts traders in a cautious mood. However, the gains in the U.S. dollar kept the currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies rose to 93.028.

Across the pond, the crude oil prices failed to stop its last week losing streak and remained depressed around below the $38.50 mark. However, the reason for the bearish bias around the crude oil prices could be attributed to the ever-increasing COVID-19 worries, which raised fears of renewed lockdown measures and depressed hopes for a swift recovery in the fuel demand. Across the pond, the anticipation of a rise in Libyan crude supply also played its major role in undermining crude oil. 


Entry Price – Sell 0.9389

Stop Loss – 0.9429

Take Profit – 0.9329

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

 

Categories
Crypto Market Analysis

Daily Crypto Review, Oct 27 – Bitcoin Preparing For a Retracement; XRP Tumbles on the Daily

The cryptocurrency sector spent the day with cryptocurrencies trying to find consolidation points as preparation for Bitcoin’s next move. Bitcoin is currently trading for $13.049, representing an increase of 0.61% on the day. Meanwhile, Ethereum lost 2.74% on the day, while XRP lost 1.73%.

The cryptocurrency sector spent the day with cryptocurrencies trying to find consolidation points as preparation for Bitcoin’s next move. Bitcoin is currently trading for $13.049, representing an increase of 0.61% on the day. Meanwhile, Ethereum lost 2.74% on the day, while XRP lost 1.73%.

The cryptocurrency sector spent the day with cryptocurrencies trying to find consolidation points as preparation for Bitcoin’s next move. Bitcoin is currently trading for $13.049, representing an increase of 0.61% on the day. Meanwhile, Ethereum lost 2.74% on the day, while XRP lost 1.73%.

 Daily Crypto Sector Heat Map

If we check out the top 100 cryptocurrencies, Flexacoin gained an astonishing 144.03% in the past 24 hours, making it the crypto to gain the most in a day. Kusama (28.07%) and Ocean Protocol (20.44%) also did great. On the other hand, Quant lost 13.61%, making it the most prominent daily loser. It is followed by Reserve Rights’ loss of 10.28% and Cybervein’s loss of 8.60%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance level had increased slightly since we last reported, with its value is currently 61.6%. This value represents a 0.5% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has stayed at the same place since we last reported. Its current value is $394.54 billion, representing an increase of $1.86 billion compared to our previous report.

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What happened in the past 24 hours?

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Technical analysis

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Bitcoin

 

The largest cryptocurrency by market capitalization has spent the past 24 hours slowly gaining value and reaching the $13,180 mark. However, it managed to make (at the moment) the third lower high in a row, creating a short-term bearish indicator. The decaying volume, as well as an increase in sell pressure around the $13,200 level, supports the claim that Bitcoin is more likely to retrace first before moving up.

Traders should pay attention to how BTC approaches $13,180 and if it (more likely) enters a price correction phase, or if it rather (less likely) pushes past $13,180 and towards #13,900.

BTC/USD 4-hour Chart

Bitcoin’s technicals are a bit more bearish than the day before, despite its price being a bit higher. Its 4-hour, daily and weekly overviews all have sell-tilted oscillators and buy-tilted moving averages, while the overall summary is slightly bullish. The monthly overview is still fully 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 slightly above its middle Bollinger band
  • RSI is slightly below being overbought (61.54)
  • Volume is descending
Key levels to the upside          Key levels to the downside

1: $13,200                                 1: $12,870

2: $13,900                                 2: $12,500

3: $14,000                                  3: $12,300

Ethereum

Ethereum has spent the day following its ascended trading channel but to the downside. The second-largest cryptocurrency by market cap bounced off of the $420 highs as it couldn’t pass either of the $415 and $420 resistance levels and pushed towards the downside. The move will most likely end somewhere between $400 and $378. However, if Bitcoin pushes towards the upside, Ethereum will most likely abandon its current pattern and trade alongside it.

Traders should watch for how Ethereum retraces and what it does after, as many safe trading patterns may emerge from that.

ETH/USD 4-hour Chart

Ethereum’s technicals are quite confusing, as its 4-hour overview is completely bearish, while its daily overview is completely bullish. Its weekly and monthly overviews are tilted towards the buy-side, but the weekly one is slightly more neutral.

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 at its lower Bollinger band
  • RSI is nearly oversold (38.94)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $415                                     1: $400

2: $420                                     2: $378

3: $435                                      3: $371

Ripple

The fourth-largest cryptocurrency by market cap trying to decide its direction. Its price started to fall down after it failed to break $0.26, but it was expected for the ascending trend line (yellow dotted line) to hold at least for a bit more. However, XRP quickly broke that level to the downside, opening itself towards more possibility of moving down.

On the other hand, some people call the most recent moves a bull flag and are entering long positions. While this is unlikely, all traders must be aware of and respect this stance as well before entering their own trades.

XRP/USD 4-hour Chart

XRP’s technicals split into two sides, with the 4-hour and monthly overviews being tilted towards the sell-side and daily and weekly overviews being tilted towards the bull-side (with a bit of neutrality).

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price slightly below both its 50-period EMA and its 21-period EMA
  • Price is between its lower and middle Bollinger band
  • RSI is ascending (42.18)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $0.26                                     1: $0.2454

2: $0.266                                   2: $0.235

3: $0.2855                                3: $0.227

 

Categories
Forex Signals

AUD/USD Breaking Below Upward Channel – Is there a Sell Trade?

The AUD/USD pair was closed at 0.71185 after placing a high of 0.71461 and a low of 0.71025. The AUD/USD pair fell on Monday and gave a bearish candle for the day. The AUD/USD pair struggled to find a direction throughout Monday however it pared to its losses amid the broad-based US dollar strength in late American hours. The risk-averse market sentiment after the rising number of coronavirus cases across the globe and the deadlock over the US stimulus package caused a surge in the greenback due to its safe-haven status.

The AUD/USD pair was closed at 0.71185 after placing a high of 0.71461 and a low of 0.71025. The AUD/USD pair fell on Monday and gave a bearish candle for the day. The AUD/USD pair struggled to find a direction throughout Monday however it pared to its losses amid the broad-based US dollar strength in late American hours. The risk-averse market sentiment after the rising number of coronavirus cases across the globe and the deadlock over the US stimulus package caused a surge in the greenback due to its safe-haven status.

The AUD/USD pair was closed at 0.71185 after placing a high of 0.71461 and a low of 0.71025. The AUD/USD pair fell on Monday and gave a bearish candle for the day. The AUD/USD pair struggled to find a direction throughout Monday however it pared to its losses amid the broad-based US dollar strength in late American hours. The risk-averse market sentiment after the rising number of coronavirus cases across the globe and the deadlock over the US stimulus package caused a surge in the greenback due to its safe-haven status.

The US Dollar Index was up by 0.30% to above 93 levels on Monday that ultimately weighed on AUD/USD pair. The US dollar was gaining on the back of increasing cases of coronavirus from Europe and other nations. Europe was hit hardest by the second wave of coronavirus as most European nations started re-imposing restrictions to curb the effects of the coronavirus crisis.

France reported more than 50,000 cases in a single day over the weekend and introduced a nationwide curfew. Spain also introduces a curfew for six months on Monday along with Italy. The rising number of countries introducing restrictive measures to control the damage of coronavirus raised questions on the economic recovery as the economies were still struggling through the previous effects of lockdowns.

These rising uncertainties increased the appeal for safe-haven that ultimately diminished the risk sentiment in the market and weighed on riskier Aussie that dragged the AUD/USD pair on the downside. On the data front, at 19:00 GMT, the US economic docket released the New Home Sales that dropped to 959K from the expected 1025K and weighed on US dollar that capped further losses in AUD/USD pair on Monday.

The Australian Dollar was also under pressure because of the last week’s latest decision of the Reserve Bank of Australia (RBA) to cut its cash rate to 0.1%, the lowest in history. The bank decided to cut its interest rates to the lowest level as the country was struggling to fight the coronavirus crisis impact on its economy. The strength of Aussie and the local economic downturn after Victoria’s lockdown pushed RBA to cut its cash rates to 0.1%.

As the Australian Dollar was already under pressure, the strength of the US dollar along with the dampened risk sentiment in the market weighed on AUD.USD pair on Monday and dragged its prices below 0.72000 level.

Daily Technical Levels

Support Resistance

0.7118 0.7145

0.7103 0.7157

0.7091 0.7171

Pivot point: 0.7130

The AUD/USD is trading with a selling bias at the 0.7120 level, facing an immediate resistance around the 0.7149 area. Below 0.7149, we may see AUD/USD pair to drop until the next support area of 0.7105 as the MACD and EMA are in support of selling. Checkout a trading plan below… 

Entry Price – Sell 0.71293

Stop Loss – 0.71693

Take Profit – 0.70893

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

 

Categories
Forex Market Analysis

Daily F.X. Analysis, October 27 – Top Trade Setups In Forex – C.B. Consumer Confidence in Play! 

On the news side, the eyes will remain on the economic events coming out of the U.S. economy. The Core Durable Goods Orders m/m and Durable Goods Orders m/m are expected to report mixed data that may or may not drive price action in dollar related events. While the C.B. Consumer Confidence will be the major highlight of the day, economists expect a slight movement on consumer confidence from 101.8 to 102.1 that may underpin the U.S. dollar today. 

On the news side, the eyes will remain on the economic events coming out of the U.S. economy. The Core Durable Goods Orders m/m and Durable Goods Orders m/m are expected to report mixed data that may or may not drive price action in dollar related events. While the C.B. Consumer Confidence will be the major highlight of the day, economists expect a slight movement on consumer confidence from 101.8 to 102.1 that may underpin the U.S. dollar today. 

On the news side, the eyes will remain on the economic events coming out of the U.S. economy. The Core Durable Goods Orders m/m and Durable Goods Orders m/m are expected to report mixed data that may or may not drive price action in dollar related events. While the C.B. Consumer Confidence will be the major highlight of the day, economists expect a slight movement on consumer confidence from 101.8 to 102.1 that may underpin the U.S. dollar today. 

Economic Events to Watch Today  

 


 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18-93 after placing a high of 1.18596 and a low of 1.18031. The EUR/USD pair moved in a bearish trend on Monday and lost most of its previous day gains. The EUR/USD pair fell on Monday amid the strong U.S. dollar and the rising number of coronavirus infections through Europe. The market turned risk-averse and weighed on the riskier EUR/USD pair that reversed its movement on Monday.

The rising number of coronavirus cases in Europe kept the shared currency under bearish pressure at the starting day of the week. Spain declared a state of emergency on Sunday for six-months and imposed a national curfew to control the spread of coronavirus. France has already placed a curfew, and it reported more than 50,000 new infections in a single day. On Monday, Italy also announced a national curfew to curb the coronavirus spread. Germany will reportedly introduce more restrictions later in the week.

On Monday, as the coronavirus situation was out of control in Europe, Germany’s DAX 30 and the Euro Stoxx 50 indexes lost more than 2%, reflecting the risk-off market sentiment that ultimately weighed on EUR/USD pair. Another factor involved in the market’s dismal sentiment was the lack of progress in the U.S. stimulus aid package. The U.S. advisor Larry Kudlow said that talks were slowed but not ended as the chances of a deal before the election were null, but investors were awaiting the post-election stimulus.

On the data front, at 14:00 GMT, the German Ifo Business Climate for October dropped to 92.7 from the projected 93.1 and weighed on single Currency Euro that added in the losses n EUR/USD pair on Monday. At 19:00 GMT, the New Home Sales from the U.S. also declined to 959K against the expected 1025K and weighed on the U.S. dollar that ultimately helped to limit the losses of the EUR/USD pair. The U.S. dollar was strong on Monday as the U.S. Dollar Index was up to 93 levels due to its safe-haven nature. The greenback rose on Monday as the global COVID-19 cases continue to soar and weigh on market sentiment. Furthermore, the rising number of infections in China decreased the appetite of risky assets like EUR/USD pair as the world’s second-largest economy could suffer a setback.

Looking forward, the Euro traders will await tomorrow for the release of the European Central Bank’s Lending Survey, and the U.S. dollar investors will be looking to September’s U.S. Durable Goods Orders report. The fresh developments surrounding the coronavirus outbreak in the continent will also remain under observation by EUR/USD pair’s investors.

Daily Technical Levels

Support Resistance

1.1839      1.1861

1.1828      1.1872

1.1817      1.1882

Pivot point: 1.1850

EUR/USD– Trading Tip

The EUR/USD is trading with a slightly bearish bias at the 1.1836 level, holding mostly below an immediate resistance level of 1.1865 area. Closing of candles below the 1.1866 level may drive selling bias until the 1.1811 level that marks 38.2% Fibonacci retracement level. Continuation of a selling bias may lead the EUR/USD pair further lower until 1.1770, the 50% Fibo level. Conversely, the bullish breakout of the 1.1866 area can open further room for buying until the 1.1910 level today. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30230 after placing a high of 1.30749 and a low of 1.29928. The GBP/USD pair dropped and continued its previous bearish trend. The GBP/USD pair extended its losses on Monday and continued its bearish streak for the 4th consecutive day, dropping below 1.3000 level despite the Brexit deal optimism in the market mainly due to the broad-based U.S. dollar strength on the day.

The British Pound held steady against the rising U.S. dollar on Monday and shrugged off the renewed demand for the safe-haven greenback on expectations that the U.K. and the E.U. will eventually reach a Brexit deal after both sides agreed to push out the deadline to reach a consensus.

Last Thursday, Brexit talks were resumed and were extended to comping Wednesday when E.U. Brexit negotiator Michel Barnier is expected to attempt to bridge some of the differences between the U.K. and E.U.

It is also assumed that Barnier’s efforts to clinch a deal could revive hopes that German Chancellor Angela Merkel might be able to persuade French President Emmanuel Macron to ease his stance on one of the key sticking points of fishing rights. The United Kingdom has stressed that it would take control over the access to its waters after the Brexit transition period ends. On the other hand, Macron fears that a softer stance over fisheries will sacrifice the French fishermen.

On the other hand, the optimism on progress this week had been mitigated somewhat following reports that the U.K. was waiting until after the U.S. election to reveal its negotiation strategy as a blue wave could weaken Britain’s negotiation stance. Joe Biden has previously said that a UK-US deal would depend on Britain securing a deal with the E.U. These concerns also weighed on British Pound and GBP/USD. However, the British Prime Minister Boris Johnson said that Brexit and the U.S. election results were entirely separate.

On the data front, at 19:00 GMT, the U.S. economic docket released the report of New Home Sales that dropped to 959K from the anticipated 1025Kand weighed on the U.S. dollar that eventually helped GBP/USD pair in capping further losses. Moreover, the GBP/USD pair’s losses could be attributed to the rising number of coronavirus cases in the U.K. As well as the rising fears of the second wave of coronavirus and its impact globally raised the safe-haven demand for greenback that ultimately added pressure on GBP/USD pair on Monday.

The developments surrounding the U.S. stimulus package also kept the U.S. dollar stronger as the package will not be delivered before the election. The stronger U.S. dollar weighed further on the GBP/USD pair on the day.

Daily Technical Levels

Support Resistance

1.3040      1.3064

1.3028      1.3076

1.3016      1.3088

Pivot point: 1.3052

GBP/USD– Trading Tip

The GBP/USD traded with a selling bias below an immediate resistance area of 1.3075. Below this, Cable has closed a bearish engulfing candle that may drive selling bias until the 1.3013 level. Violation of 1.3013 level can open further room for selling until 1.2965 area, the level that’s extending support due to upward trendline on the 4-hour timeframe. The MACD and RSI are in support of selling bias today. Consider opening sell trades below the 1.3075 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.866 after placing a high of 105.053 and a low of 104.651. The USD/JPY pair remained bullish on Monday and recovered most of the previous daily losses. The USD/JPY pair rose to its highest level in five days above 105 level on Monday. However, it erased a large portion of its gains on the day during the American session.

The broad-based U.S. dollar strength caused the rise in the USD/JPY pair on the day due to its safe-haven status. The selling pressure surrounding the major European currencies on concerns over the rising number of coronavirus cases in the continent also helped the U.S. dollar outperform its rivals. The U.S. Dollar Index that was dropped 1% last week posted a decisive recovery on the starting day of this week and was up by 0.32% on the day at 93.04.

The rising U.S. dollar Index pushed the USD/JPY pair above the 105 level on Monday. However, investors saw this as a selling opportunity regardless of the U.S. dollar strength, and hence, the pair started losing most of its daily gains in the late trading hours. On the data front, at 04:50 GMT, the SPPI for the year from Japan raised to 1.3% against the forecasted 1.0% and supported the Japanese Yen that capped further gains in the USD/JPY pair on Monday.

At 19:00 GMT, the New Home Sales from the U.S. for September fell to 959K from the forecasted 1025K and weighed on the U.S. dollar that also limited further upside in the USD/JPY pair on the day.

The U.S. dollar was also strong on Monday as the talks for the next round of U.S. stimulus measures were stalled till the election. Both parties were moving forward to reach a consensus over the stimulus aid package’s size, but they delayed the delivery of major measures after the election. This raised the U.S. dollar on board and pushed the USD/JPY pair even higher on Monday. Other than that, the U.S. dollar was also up due to rising demand for its safe-haven nature amid the rising number of coronavirus cases globally. France reported 50,000 new cases in a single day and introduced a curfew to curb the virus’s spread. 

Just like that, many European nations, including Italy and Spain, also introduced curfews and restrictive measures. Germany was set to impose restrictions this week and not only in European nations, but the second wave of coronavirus was also spreading worldwide. These concerns weighed on market risk sentiment and raised demand for the greenback that ultimately added strength to the USD/JPY pair on Monday.

Looking forward, the investors will await the release of Durable Goods Orders and the Conference Board’s Consumer Confidence data that will release on Tuesday.

Daily Technical Levels

Support Resistance

104.18      105.35

103.68      106.00

103.02      106.51

Pivot point: 104.84

USD/JPY – Trading Tips

The oversold USD/JPY pair is taking a bullish turn now, perhaps to complete Fibonacci retracement at 104.900 level. A 38.2% Fibonacci retracement level extends this level, and it may extend resistance to the USD/JPY pair today. Continuation of a bullish bias over the 104.900 level can lead the USD/JPY pair further higher until the 105.225 level. The MACD and RSI are also supporting bullish bis in the USD/JPY pair today. However, the pair seems to have formed a bearish flag on the 4-hour timeframe that typically breakout on the lower side; if that happens, we may see USD/JPY price dropping until the 104.350 mark. Good luck! 

Categories
Forex Signals

USD/CAD Bullish Channel Breakout – Potential Buying Trade! 

The USD/CAD pair was closed at 1.31379 after placing a high of 1.31771 and a low of 131235. The USD/CAD pair remained flat throughout the day as it ended its day at the same level it started its day at 1.31378.

The USD/CAD pair was closed at 1.31379 after placing a high of 1.31771 and a low of 131235. The USD/CAD pair remained flat throughout the day as it ended its day at the same level it started its day at 1.31378.

The USD/CAD pair was closed at 1.31379 after placing a high of 1.31771 and a low of 131235. The USD/CAD pair remained flat throughout the day as it ended its day at the same level it started its day at 1.31378.

The on-again-off-again talks for the US stimulus package between Republicans and Democrats confused the traders and caused a flat movement in the USD/CAD pair on Thursday. The House of Representative Speaker Nancy Pelosi and the US Treasury Secretary Steven Mnuchin held talks on Thursday, but the prospect of a deal before elections were dimmed.

If a deal was reached tomorrow, the stimulus package will still not be implemented until after the election. For US President Trump who has pushed for a larger stimulus, it will be good news, but for Republicans senators who have their election campaigns to worry about, it will be bad news. A massive stimulus spending package before elections will not win many votes among conservative voters. Given this situation, the hopes for a stimulus measure package before elections faded away and raised bars for the US dollar that pushed the pair USD/CAD on the upside.

On the data front, the macroeconomic releases from the US on Thursday were also in favor of the US dollar. At 17:30 GMT, the Unemployment Claims from the US reduced to 787K from the anticipated 860K and supported the US dollar. While at 19:00 GMT, the CB Leading Index dropped to 0.7% from 0.8%of expectations and weighed on the US dollar. The Existing Home Sales from the US also raised to 6.45M from the expected 6.20M and supported the US dollar.

The US dollar was even stronger from the macroeconomic data release and pushed the USD/CAD pair even higher to 1.31771 level on Thursday. Whereas, the USD/CAD pair failed to remain on the bullish side as the crude oil prices rose on Thursday.

The rise in WTI crude oil prices above the $41 level gave strength to commodity-linked Loonie that ultimately weighed on USD/CAD pair, and the pair started to lose its early daily gains and ended its day on the same level it started its day with and the pair gave flat movement for the day.


Daily Technical Levels

Support Resistance

1.3110 1.3167

1.3087 1.3201

1.3052 1.3224

Pivot point: 1.3144

The USD/CAD is trading with a bullish bias, especially after violating the upward channel that was enlarging resistance at 1.3203 level. On the lower side, the USD/CAD may find next support at 1.3203 area, and violation of this mark can drive the Loonie price towards the next support mark of 1.3172. The MACD is in a buying zone; therefore, we should look for a buying trade over 1.3203 level. Good luck!

Categories
Crypto Videos

Forex Fundamental Analysis for Novices – Trading The UK Claimant Count!

https://youtu.be/kcdMogts3GI

https://youtu.be/kcdMogts3GI

 

Fundamental Analysis for Novices: The UK Claimant Count

 

Thank you for joining this oryx academy educational video for novices. In this session, we will be looking at with claimant count and studying an example from Great Britain to try and establish what it might mean for trading the British pound.

If this is the first time you have viewed one of our fundamental analysis videos and you happen to be a new trader, we recommend that you use a financial calendar every day in order to plan your trading activities around the fundamental economic releases which governments statistics departments and other economic specialist firms release on behalf of governments. These are usually released on a weekly, monthly quarterly, and annual basis. The majority are subject to a time embargo.
This is typically what you might expect to see on an economic calendar, and these are available by most broking firms.

The most critical components of an economic calendar are the day and date, the time of the economic statistical release, the type of event, and the likely impact that this release could have on the market, which typically has 3 levels, low, medium, and high. High impact economic data releases can cause significant volatility in the market post-release, and it is essential that you are not caught offside because you didn’t know it was happening. This could cause significant losses for you and therefore adds weight to the fact that you must use an economic calendar every day. The other information that the economic calendar will provide you with is the previous data release, a general consensus, which will have been put together by leading economists. The actual figure will be quickly populated on to the calendar shortly after its release. This information can then be compared to the consensus and the previous data release in order to try and establish if the information is better, worse, or the same for the particular country’s economy.

Here we can see that on Tuesday, September 15th at 7 a.m. BST, the Great Britain claimant count rate for August is expected, along with the claimant count change for August. These are both predicted to have a medium impact on the market. We can also see the previous figures for July. However, there is no consensus. Please note that this information will also be simultaneously released with unemployment and average earnings, and where traders will take all of the released information into consideration before trading in accordance with the data. Because the unemployment rate is a high impact event, we must take this into consideration even though the claimant count is set as a medium.

So, what is the claimant count? This statistic is released by the National Statistics body, and it is a monthly measurement of unemployment within the United Kingdom. It is essentially a barometer for the health of the UK Labour market. Traders will be looking for higher rates of employment because this means that the economy is expanding. In this circumstance, it means the UK is bouncing back from the covered pandemic and indicates that the UK economy is expanding. Therefore, traders will be looking for a lower number in the claimant count than the previous month, which is seen as bullish or good for the Pound, while an increase in the number of claimants is seen as negative and both bad for the UK economy and the Pound, which might fall against its counterparts.

Categories
Forex Course

158. Where to Find Authentic Forex News and Market Data?

Introduction

Introduction

Introduction

Fundamental analysis is an integrated part of forex trading. It provides an exact logic and reason behind the movement of a currency pair. However, the fundamental analysis depends on several fundamental releases and news. Therefore, it is evident for a trader to know the source of this news.

What is Forex News and Market Data?

Forex news is economic, geopolitical, and financial news that may directly affect the price of a currency pair. Moreover, fundamental data are economic releases that show the current and upcoming economic conditions of a country.

The price of currency pairs depends on many factors, and traders evaluate it to anticipate the market movement. For example, if a country achieved its targeted inflation rate, and the central bank raised the interest rate, it will indicate stronger economic conditions that may influence traders to take traders in a specific direction.

However, it is essential to find the source where the forex news and market data are available.

Where to Find Forex News and Market Data

Forex trading becomes very easy nowadays as most economic news and market data are available on the internet as soon as it releases. Therefore, forex trading becomes very attractive to retail traders as they can operate all their activities from home with a computer and a stable internet connection.

Let’s have a look where we can find this information:

Forex Brokers

Many forex brokers provide integrated market news and an economic calendar where the upcoming economic releases and events are scheduled. It will update as soon as the news comes and will provide historical data. Some brokers provide exclusive technical and fundamental analysis based on forex news and market data, which is also helpful for traders.

News Portal

Besides the forex broker, there are many websites where forex economic calendar and events are released. It also provides technical and fundamental analysis based on the available information. However, some trading portals offer live charts with economic data.

Image Source: www.forexfactory.com

Forex Indicator

Besides the MT4 and MT5 trading platform’s stock indicator, several custom-based indicators show the upcoming news in a box within the price chart. When the news comes, it shows the result immediately on the chart. On the other hand, MT4 and MT5 have a built-in economic and fundamental news service, which is very useful.

Conclusion

It is not very hard to find forex news and market data as it is available publicly, and anyone can access it. However, the challenging part is getting the news immediately after release. The news’s timing may differ based on the quality of the internet connection and execution speed of the news providing website.

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Categories
Forex Market Analysis

Daily F.X. Analysis, October 26 – Top Trade Setups In Forex – New Home Sales in Play! 

On Monday, the market is likely to exhibit thin trading volume and volatility in the wake of the Labor day holiday in New Zealand, while the other economies are expecting to release low impact events that may keep the market unchanged. Most of the focus will stay on the U.S. New Home Sales data that may help drive some market volatility today. 

On Monday, the market is likely to exhibit thin trading volume and volatility in the wake of the Labor day holiday in New Zealand, while the other economies are expecting to release low impact events that may keep the market unchanged. Most of the focus will stay on the U.S. New Home Sales data that may help drive some market volatility today. 

On Monday, the market is likely to exhibit thin trading volume and volatility in the wake of the Labor day holiday in New Zealand, while the other economies are expecting to release low impact events that may keep the market unchanged. Most of the focus will stay on the U.S. New Home Sales data that may help drive some market volatility today. 

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18562 after placing a high of 1.18646 and a low of 1.17865. The movement of the EUR/USD pair was bullish on Friday. Things in European nations were getting out of control and led the governments to impose further restrictions to curb coronavirus’s effect on the economy. France, Italy, and Spain reported a record rise in the daily infection cases that urged their governments to impose curfews and lockdowns.

However, the single currency managed to remain bullish on Friday despite the rising number of coronavirus cases in Europe as the focus of traders shifted more towards the U.S. dollar. The coronavirus condition in the U.S. was also not better as the country reported a record-high number of 82,668 cases in a single day and weighed on the U.S. dollar that ultimately supported the bullish trend of the EUR/USD pair on Friday.

On the data front, at 12:15 GMT, the French Flash Services PMI for October dropped to 46.5 against the forecasted 47.0 and the previous 47.5 and weighed on Euro. The French Flash Manufacturing PMI came in as 51.0 against the expected 51.3 and previous 51.2. AT 12:30 GMT, the German Flash Manufacturing PMI raised to 58.0 against the expected 55.0 and previous 56.4 and supported the single currency. Simultaneously, the German Flash Services PMI raised to 48.9 against the expected 49.6 and previous 50.6 and weighed on the single currency Euro.

At 13:00 GMT, the Flash Manufacturing PMI from Eurozone for October raised to 54.4 against the projected 53.0 and previous 53.7 and supported the single currency Euro. Whereas the Flash Services PMI from the whole bloc dropped to 46.2 from the anticipated 47.1 and the previous 48.0, it also weighed on the single currency Euro. At 17:59 GMT, the Belgian NBB Business Climate from Europe came in as -8.5 against the forecasted -11.2 and supported the single currency. The Eurozone’s macroeconomic data was mixed and failed to provide any meaningful direction to the currency pair EUR/USD on Friday.

From the U.S. side, at 18:45 GMT, the Flash Manufacturing PMI came in line with the expectations of 53.5 for October. The Flash Services PMI from the U.S. for October advanced to 56.0 from the projected 54.7 and supported the U.S. dollar that ultimately capped further gains in EUR/USD pair.

Another factor that kept the additional gains in EUR/USD pair supported was the improved risk sentiment as President Donald Trump and Democratic Joe Biden took part in the final debate of the presidential election campaign in Nashville, Tennessee. The final debate was far more civilized than the previous one, and it potentially led to an additional tightening in the polls that raised the risk sentiment in the market and supported the EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1796     1.1853

1.1776     1.1888

1.1740     1.1909

Pivot point: 1.1832

EUR/USD– Trading Tip

The EUR/USD is trading with a slightly bearish bias at the 1.1836 level, holding mostly below an immediate resistance level of 1.1865 area. Closing of candles below the 1.1866 level may drive selling bias until the 1.1811 level that marks 38.2% Fibonacci retracement level. Continuation of a selling bias may lead the EUR/USD pair further lower until 1.1770, the 50% Fibo level. Conversely, the bullish breakout of the 1.1866 area can open further room for buying until the 1.1910 level today. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30400 after placing a high of 1.31221 and a low of 1.30189. Overall the movement of the GBP/USD pair remained bearish throughout the day. The GBP/USD pair was down on Friday as the U.S. dollar gained traction on board and made GBP/USD pair weak. As well As, the retreat inequity and risk sentiment also hit the Pound that dropped to fresh lows.

Wall Street’s equity prices went lower on Friday and raised the greenback on board that ultimately dragged GBP/USD pair on the downside. The Dow Jones was down by 0.10%, and NASDAQ was down by 0.18%. The expectations for a new round of fiscal stimulus by the U.S. government before elections faded away and supported the U.S. dollar that ultimately weighed on GBP/USD pair.

Meanwhile, the Chief EU Brexit negotiator Michel Barnier will provide his weekly assessment of the talks and could point to a lack of meaningful progress despite intensifying talks. The British Brexit negotiator, David Frost, could also do that, and these concerns kept the British Pound under pressure at the ending day of the week.

However, the cautious optimism was prevailing in the market as the E.U. and U.K. had resumed talks related to the Brexit deal. The French President has said to the local fishing industry to brace for an impact that indicated a close deal. Whereas the investors were still cautious as talks could be bent on either side, British Pound remained under pressure ahead of the talks’ results. Moreover, the rising number of coronavirus cases in the United Kingdom pressured the authorities to impose a new full lockdown; however, some were refusing to do so as it had already cost the economy too much. These tensions in the local country also kept the British Pound under pressure.

On the data front, at 04:01 GMT, the GfK Consumer Confidence from Great Britain dropped to -31 against the expected -28and weighed on British Pound and added losses in GBP/USD pair. At 13:30 GMT, the Flash Manufacturing PMI for October remained flat with the anticipated 53.3, and the Flash Services PMI dropped to 52.3 against the projected 53.4 and weighed on British Pound and pulled the pair GBP/USD even lower.

From the U.S. side, at 18:45 GMT, the Flash Manufacturing PMI came in line with the anticipations of 53.5 for October. The Flash Services PMI from the U.S. for October raised to 56.0 from the expected 54.7 and supported the U.S. dollar that ultimately dragged the GBP/USD pair on the downside on Friday.

Daily Technical Levels

Support Resistance

1.3049     1.3129

1.3021     1.3179

1.2970     1.3208

Pivot point: 1.3100

GBP/USD– Trading Tip

The GBP/USD traded with a selling bias below an immediate resistance area of 1.3075. Below this, the cable has closed a bearish engulfing candle that may drive selling bias until 1.3013 level. Violation of 1.3013 level can open further room for selling until 1.2965 area, the level that’s extending support due to upward trendline on the 4-hour timeframe. The MACD and RSI are in support of selling bias today. Consider opening sell trades below the 1.3075 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.695 after placing a high of 104.934 and a low of 104.545. The USD/JPY pair moved in a bearish trend throughout Friday. The USD/JPY pair fell on Friday after the final presidential debate between U.S. President Donald Trump and Joe Biden before the November 3rd election.

The Final debate between two presidential candidates took place in Nashville, Tennessee. This final debate was more restrained than the first one. The center of the discussion was on policy rather than a personal attack.

It looked like investors were closing their long positions ahead of the elections and were hesitant to place any big position ahead of November 3 as polls before the final debate turned, so it became difficult to project the outcome of elections.

Investors were also keeping a close eye on the negotiations between House of Representative Speaker Nancy Pelosi and the U.S. Treasury Secretary Steven Mnuchin over the next round of U.S. stimulus package. Pelosi has expressed optimism that a consensus could be reached. In contrast, the expectations that a U.S. stimulus package could be delivered before elections faded away as the date of the election has come closer.

These hopes that a stimulus relief bill could not be delivered ahead of elections, whether both parties agreed on the package’s size as the election was only a week away, supported the U.S. dollar and capped further losses in the USD/JPY pair on Friday.

On the data front, at 04:30 GMT, the National Core CPI from Japan for the year came in as -0.3% against the forecasted -0.4% and supported the Japanese Yen that added in the USD/JPY’s losses. At 05:30 GMT, the Flash Manufacturing PMI dropped to 48.0 from the projected 48.4 and weighed on the Japanese Yen.

Daily Technical Levels

Support Resistance

104.18     105.35

103.68     106.00

103.02     106.51

Pivot point: 104.84

USD/JPY – Trading Tips

The oversold USD/JPY pair is taking a bullish turn now, perhaps to complete Fibonacci retracement at 104.900 level. This level is extended by a 38.2% Fibonacci retracement level, and it may extend resistance to the USD/JPY pair today. Continuation of a bullish bias over the 104.900 level can lead the USD/JPY pair further higher until the 105.225 level. The MACD and RSI are also supporting bullish bis in the USD/JPY pair today. However, the pair seems to have formed a bearish flag on the 4-hour timeframe that typically breakout on the lower side; if that happens, we may see USD/JPY price dropping until the 104.350 mark. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Oct 26 – JP Morgan Calls Bitcoin “Currency With A Large Upside Potential”; Crypto Preparing For A Big Move

The cryptocurrency sector spent the weekend hovering around the same spot as Bitcoin was testing its ~$13,000 level. Bitcoin is currently trading for $13.049, representing a decrease of 0.80% on the day. Meanwhile, Ethereum lost 1.52% on the day, while XRP gained 0.18%.

The cryptocurrency sector spent the weekend hovering around the same spot as Bitcoin was testing its ~$13,000 level. Bitcoin is currently trading for $13.049, representing a decrease of 0.80% on the day. Meanwhile, Ethereum lost 1.52% on the day, while XRP gained 0.18%.

The cryptocurrency sector spent the weekend hovering around the same spot as Bitcoin was testing its ~$13,000 level. Bitcoin is currently trading for $13.049, representing a decrease of 0.80% on the day. Meanwhile, Ethereum lost 1.52% on the day, while XRP gained 0.18%.

 Daily Crypto Sector Heat Map

If we check out the top 100 cryptocurrencies, Flexacoin gained an astonishing 171.94% in the past 24 hours, making it the crypto to gain the most in a day. Filecoin (56.89%) and Reserve Rights (13.22%) also did great. On the other hand, Energy Web Token lost 7.94%, making it the most prominent daily loser. It is followed by Cosmos’ loss of 5.78% and ABBC Coin’s loss of 5.71%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance level had increased slightly since when we last reported, with its value is currently 61.1%. This value represents a 0.3% difference to the upside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has stayed at the same place since we last reported. Its current value is $396.38 billion, representing an increase of $1.83 billion compared to our previous report.

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What happened in the past 24 hours?

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Technical analysis

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Bitcoin

The largest cryptocurrency by market capitalization has spent the weekend hovering around the $13,000 mark, and even attempted to break through the $13,200 resistance level (but failed to). With the volume is descending ever since Oct 21, most analysts are expecting a big move very soon. However, they are torn when it comes to the direction.

Traders should pay attention to how BTC handles its push towards the resistance level, as there might be good trading opportunities after (more likely) the level holds and a pullback occurs, or after BTC breaks the level and pushes higher (less likely).

BTC/USD 4-hour Chart

Bitcoin’s sentiment is highly bullish, with its shorter time-frames showing a bigger tilt towards neutrality, while its longer time-frames are more titled to the buy-side.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is far above its 50-period EMA and slightly above its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is slightly below being overbought (62.22)
  • Volume is descending
Key levels to the upside          Key levels to the downside

1: $12,870                                 1: $12,500

2: $13,200                                 2: $12,300

3: $14,000                                  3: $12,000

Ethereum

Ethereum has continued its descent from the highs it made on Oct 22, with its price moving slowly towards the downside. The smaller time-frame charts are showing that ETH kept creating new lower highs, with one (failed) attempt to break out of the trend. The next couple of hours will be crucial, as Ethereum is about to hit the trend line, break it or continue pushing down towards $400.

Traders should watch for how Ethereum reacts to the descending trend line and trade off of it.

ETH/USD 2-hour Chart

Ethereum’s technicals are tilted towards the buy-side on all time-frames, with its lower time frames being slightly more neutral.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is above its 50-period and slightly above its 21-period EMA
  • Price is at its Bollinger band
  • RSI is overbought (52.24)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $415                                     1: $400

2: $420                                     2: $378

3: $435                                      3: $371

Ripple

The fourth-largest cryptocurrency by market cap spent the weekend testing its ascending support level (the dotted yellow line), which dates back from Oct 16. XRP has slowly descended from its most recent highs and reached the support line at the ~$0.252 level. The line provided good support, and XRP shot up as a result of it. However, it could not break the $0.26 resistance level, which may prove a problem in the long run.

XRP is unlikely to pass $0.26 unless it is fueled by Bitcoin’s push towards the upside. The more likely scenario would be that XRP hovers between the support line and the $0.26 level for some time.

XRP/USD 4-hour Chart

XRP’s technicals are bullish with hints of neutral sentiment on the 4-hour, 1-day, and 1-week time-frames, while its monthly time-frame shows strong bearish sentiment.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price above both its 50-period EMA and its 21-period EMA
  • Price is near its top Bollinger band
  • RSI is ascending (58.25)
  • Volume is elevated
Key levels to the upside          Key levels to the downside

1: $0.26                                     1: $0.2454

2: $0.266                                   2: $0.235

3: $0.2855                                3: $0.227

 

Categories
Crypto Market Analysis

BTC/USD Chart Overview + Possible Outcomes

In this weekly BTC /USD analysis, where we are looking at the most recent events, the current technical formations, as well as discussing possible outcomes.

In this weekly BTC /USD analysis, where we are looking at the most recent events, the current technical formations, as well as discussing possible outcomes.

In this weekly BTC /USD analysis, where we are looking at the most recent events, the current technical formations, as well as discussing possible outcomes.

Overview

Bitcoin has had another week of explosive gains, mostly due to its fundamentals. This week’s spike can’t go without mentioning PayPal’s announcement that it will enable its users to buy, sell and hold crypto, as well as that it will not be just a gimmick but rather a crucial factor in PayPal’s future business development (PayPal will offer crypto payments to its 26 million merchants, as well as enable the usage of crypto on its payment processing app Venmo). This news, alongside other news of large corporations investing tens of millions in Bitcoin and crypto, sparked the push past $12,000 and up to $13,235.

Technical factors



Bitcoin has abruptly left its triangle formation last week, pushing a little above $11,700 before consolidating and pulling back. After being pressed between $11,300 and $11,500 for some time, the PayPal news broke out, and Bitcoin surged, reaching as far as $13,235 before the move stopped.
Bitcoin is now in a consolidation phase, creating a triangle formation on the smaller time-frames. The formation is accompanied by descending volume, indicating that the move that will follow will be quite strong. Its RSI is overbought on all time-frames above 4 hours, while its moving averages are at play only at the 1-hour chart, where the current price is supported by the 21-period moving average.
Sentiment built around Bitcoin is certainly bullish at the moment, and any serious downturns are very unlikely. However, a slight pullback before the next push is likely.
Another thing to add is that Bitcoin is one step away from moving into the “fresh air” territory (after the 2019 high of $13,900) where there is no technical or historical volume ahead, meaning that this territory will be full of new people entering the market to chase profits as well as smart money taking profits.

Likely Outcomes

Bitcoin currently has two main scenarios it can play out. Both of these scenarios are bullish, where one breaks out above the current 1h time-frame triangle formation to the upside and past the $13,200 area, while the other one involves a pullback before the spike.
1: As shown in the chart, Bitcoin will most likely have to retrace slightly and reset its RSI level. While the bull sentiment is prevailing, the largest cryptocurrency by market cap should establish and confirm its support at the ~$12,500 level (which it breezed through) before going further up.
2: The other scenario is slightly less likely, and involves a simple breakout scenario of the current triangle formation to the upside and a push towards (ultimately) $13,900. This level will certainly be contested as it is the last frontier before the all-time high territory. On top of that, many investors will most likely take profit at this level.

The scenario in which Bitcoin suddenly down sharply and swiftly is incredibly unlikely. While a strong move in this direction is possible only if it’s backed by some bearish news/events, the bull phase Bitcoin is in at the moment is highly resistant to bad news.

Categories
Forex Videos

Forex & The Recent Market Drivers – What You Need To Know Trading The Next Few Weeks!

https://youtu.be/-3lzxymNNmg

https://youtu.be/-3lzxymNNmg

Recent market drivers

 

Thank you for joining this forex academy educational video. In this session, we will be taking a snapshot of the recent market drivers, which might explain the moves in bitcoin, the Dow Jones, and a couple of major currency pairs.

Festival we have the dollar index charts also known as the DXY, and where the dollar is measured against a basket of 6 major currencies, including the yen, the pound, the Australian dollar, the New Zealand dollar, the Swiss franc, the euro, and the Canadian dollar, and where the dollar index reached and high of 103.00 at position A, during the middle of March when Europe was in the grip of the pandemic and where the United States was not yet at its peak. We then see a low at position B, of 92.00, and where there is the dollar strength subsequently began to return, and now we can have a look at the possible reasons why.

Firstly we should take a look at the Dow Jones industrial average index whereby around the middle of February this year, Dow Jones hit an all-time record at 29,500 points, before crashing all the way down to 18,400 as the pandemic started to grip the United States. Although circumstances remain bad with the United States economy, the Dow Jones has rallied all the way up to a recent high above 29,000, almost approaching the previous record high, but where the fundamental economics do not match the previous rise from February. This may well have been a tipping point for traders who were already expecting a reversal in price action, and potentially we and see profit-taking at these levels.

Now let’s take a look at the GBPUSD pair, AKA Cable. In December, when Britain voted to leave the European Union, the pair was on a high at 1,3350 at position A. Still, when the pandemic hit, Cable went down to just above 1.1400, again we have seen an incredible rally all the way back up to a high at position B of 1.3380. And then a pull lower to the current level of 1.2950 at the time of writing. The shift higher can only be attributed to dollar weakness because the United Kingdom is still suffering from the pandemic’s fallout and where no agreement has yet been reached regarding a future trading relationship with Europe. The pair will likely find further weakness the closer the UK gets to a no-deal arrangement with Europe.


If we now turn our attention to the EURUSD pair, we can see that at position A, at the height of the pandemic in Europe, the currency pair was trading at 1.0600, before moving to a recent high of 1.1936, before falling lower to its current level at 1.1760 at the time of writing.
The sharp reversal in the Cable’s high at 1.3380 and EURUSD pair at 1.1936 can be attributed to the DXY reversing from its fall and bouncing off from its low of 92.00
The reversal of the DXY from 92.00 to its current level of 93.50 at the time of writing can be attributed to the reversal in the Dow Jones from an almost double top formation of a previous record-breaking high. The economic fundamentals are not working as in a normal stable market.

Let’s take a look at the bitcoin to the US dollar, which is currently trading at 10,230 but found resistance at 12,000 recently, and whereby this is no coincidence that this price rejection coincided with the DXY bouncing off of the key 92.00 level.

While some analysts will argue that the markets that we have looked at today are not correlated, either positively or negatively, the numbers and charts speak for themselves.
When trading, always try and factor in as many assets as possible to try and established which might be affecting the other and how that might, in turn, might affect the asset that you are trading.

 

Categories
Forex Fundamental Analysis

How ‘Pending Home Sales’ Data Can Be Used For Analysing The Forex Market?

Introduction

For any economy, the real estate sector plays a significant role in signaling consumer demand, credit situation, and economic sentiment. For this reason, policymakers track real estate data that can be used to inform their monetary and fiscal policies. Furthermore, economists, financial analysts, and consumers use this data for their varying needs. It is essential for a forex trader to understand how the trends of pending home sales affect the forex market.

Understanding Pending Home Sales

Pending home sales is defined as homes that are yet to be sold. The contracts for sales have been signed, but the transaction has not been completed yet.

Note that the pending home sales can also be used as a leading indicator of existing home sales. It is leading the home sales because, generally, a real estate contract takes about a month or two to close. Thus, when the contracts are closed, pending home sales become existing home sales. It can be said to offer concrete data on future home sales and the trend in real estate. Broadly, it is a leading indicator for the real estate industry based on the fact that pending home sales data involves signed contracts in real estate.

Source: St, Louis FRED

The pending home sales data is calculated monthly. In the US, for example, pending home sales data is published by the National Association of Realtors (NAR). NAR surveys about 100 Multiple Listing Service (MLS) and large real estate brokers. The MLS is a database tracking property at different stages of the sales cycle. The sample size covers 20% of all transactions, covering up to 50% of the existing home sales. Thus, the pending home sales provide a highly accurate forecast of the existing home sales compared to other housing indicators with lower coverage.

It is important to note that not all pending home sales are closed. It is normal to have a few real estate contracts that fall through or get canceled. However, about 80% of all pending home sales are settled.

Pending home sales index (PHSI) is an index based on the pending home sales. This index is considered more accurate than the aggregate data of the pending home sales. It accounts for 20% of the home contracts that fall through. Its accuracy stems from the fact that it is based on aggregated trends in the pending home sales, thus not skewed by the fallout rate.

Using Pending Home Sales in Analysis

It is important to use the aggregate pending home sales data alongside the pending home sales index. In general, real estate data offers invaluable insight into economic growth. Let’s take an example of increasing the pending home sales index.

Since it typically takes about a month or two for the pending home sales to close, an increase in the numbers shows that households expect to have sufficient funds to complete the sale. An increasing PHSI shows that the number of sellers is increasing as well as the number of buyers. Buyers expect that in the coming months, they will be well-off enough financially to close. Similarly, sellers expecting the proceeds from the sale, are going to be better off financially. Furthermore, the process of selling a home involves realtors, lawyers, and financial advisors who get a commission on the sale for their professional services. Therefore, higher PHSI shows that the economy is expanding.

Home sales rarely involve an all-cash transaction. An increase in the pending home sales signals that households have access to cheaper financing. The cheaper home-purchase financing can only be made possible by the availability of lower interest rates. The presence of a lower interest rate in the economy generally means that more people can afford loans and lines of credit. For consumers, this increases the aggregate demand in the economy, which increases the aggregate demand. Overall, the availability of cheap loans results in economic expansion and the growth of consumer discretionary industries.

For those participating in real estate speculatively, buying and selling a property can be used as a gauge of their economic growth sentiment. When speculative buyers are increasing, they have a positive outlook for the economy and that their property’s value will increase thanks to a future increase in demand. Similarly, when a speculative seller is increasing, they can now fetch more in terms of the value of their property compared to when they bought them. Thus, the current economy is performing better than it was previously. Thus, the pending home sales data can be used to show economic prospects and compare the present economic conditions against the past.

Impact on Currency

As we have seen above, the pending home sales data and the pending home sales index can offer insights into the current economic climate compared to the past and give sentiment about the future. Although it is considered a leading indicator in the real estate sector, pending home sales is regarded as a medium-impact indicator in the forex market. Here are two ways this indicator can potentially impact the currency.

An increasing pending home sales show improving household welfare. It signals the presence of lower unemployment levels and increased aggregate demand in the economy. Furthermore, since people purchase property, expecting them to appreciate, increasing pending home sales gives a positive economic sentiment for the future, which makes the currency appreciate relative to others.

Conversely, it is negative for the currency when pending home sales are on a decline. The decline shows that macroeconomic fundamentals, such as employment, are declining. More so, it indicates a pessimistic economic outlook.

Sources of Data

In the US, the pending home sales data and the pending home sales index are published monthly by the National Association of Realtors. Trading Economics provides a detailed look into the historical pending home sales statistics in the US.

How Pending Home Sales Data Release Affects Forex Price Charts

The most recent data on pending home sales in the US was released on September 30, 2020, at 10.00 AM ET. The release can be accessed at Forex Factory. An in-depth look into the latest pending home sales and the PHSI can be accessed at the NAR website.

The screengrab below is of the monthly pending home sales from Forex Factory. To the right, is a legend that indicates the level of impact the fundamental indicator has on the USD.

As can be seen, the pending home sales data is expected to have a medium impact on the USD upon its release.

The screengrab below shows the most recent change in pending home sales. In August 2020, the US pending home sales increased by 8.8% compared to 5.9% in July. This change was better than the expected 3.1%.

Now, let’s see how this release made an impact on the Forex price charts.

EUR/USD: Before Pending Home Sales Release on September 30, 2020, 
Just Before 10.00 AM ET

The above 5-minute EUR/USD chart shows the pair mostly trading in a neutral pattern before the news release. Twenty minutes before the announcement, the pair adopted a sharp downtrend with candles crossing below a dropping 20-period MA.

EUR/USD: After Pending Home Sales Release on September 30, 2020, at 10.00 AM ET

After the news release, the pair formed a 5-minute ‘inverted hammer’ candle. Subsequently, the pair adopted a bullish stance as the candles crossed and formed further above the 20-period MA.

Bottom Line

As seen above, the US’s release pending home sales data did not have any impact on the USD. Therefore, we can conclude that as a fundamental indicator, pending home sales has a negligible impact on the forex market.

Categories
Forex Course

157. What Expectations Do Forex Market Have On The Financial News?

Introduction

Introduction

Introduction

Economic releases and news are essential for traders who make trading decisions based on fundamental analysis. Economic news is publicly available as soon as it releases. Therefore, traders can access it from any internet connection enabled device. As economic releases directly affect the currency market, traders must understand how to use it.

Types of Economic News

There are three types of economic news for the currency market- low impact, medium impact, and high impact. Among these types, the high impact news is essential as it immediately impacts a currency pair. Some example of high impact economic news is-

  • Interest rate decision
  • Inflation report
  • Retail Sales
  • PMI
  • GDP
  • Export and Import
  • Foreign Currency Reserve

Besides, the high impact news, medium, and low impact news often create a good movement in the market, which is not very frequent. Therefore, we should stick to high and medium impact news only.

How Economic News Affect the Currency Pair?

There are three significant elements of the economic news that a trader should consider while doing analysis. They are:

  • Previous Release- Previous data is the most recent release used to compare with the current data.
  • Expectation- Before releasing every news, analysts project the data. If the news comes better than expected, it will be shown in green and indicate a positive effect on the currency.
  • Current Release- It is the most important part as trading decisions depend on it. The current release is the data that usually release on a particular day.

Let’s have a look at how to read the news:

  • The current release is better than the Previous release- Good for the currency
  • The current release is better than the expectation- good for the currency
  • The current release is worse than the previous release- bad for the currency
  • The current release is worse than the expectation- bad for the currency.

Image Source: www.forexfactory.com

In the above image’s marked area, we can see that the US monthly retail sales came at 1.2%, where the previous data was 8.4%, and the expectation was 2%. As the news massively declined from 8.4% to 1.2%, the US Dollar became weaker than the Euro as indicated in the image below:

Conclusion

As of the above discussion, we can say that better than expected and previous data may positively impact the currency, and weaker than expected data will negatively impact a currency. However, we should consider the overall fundamental outlook of a country to take the ultimate trading decision.

[wp_quiz id=”86431″]
Categories
Forex Signals

USD/JPY Violates Bearish Flag – Buckle up for a Sell Signal! 

The USD/JPY pair is trading sharply bearish after violating the bearish flag at the 104.680 level. Below this level, we may have more selling trade opportunities. The USD/JPY pair traded with a positive note during the whole Thursday session after a goodish pickup in the U.S. dollar demand. The rebounded U.S. dollar helped currency pair USD/JPY to gain positive traction and move away from the six-week lowest level it touched on Wednesday.

The USD/JPY pair is trading sharply bearish after violating the bearish flag at the 104.680 level. Below this level, we may have more selling trade opportunities. The USD/JPY pair traded with a positive note during the whole Thursday session after a goodish pickup in the U.S. dollar demand. The rebounded U.S. dollar helped currency pair USD/JPY to gain positive traction and move away from the six-week lowest level it touched on Wednesday.

The USD/JPY pair is trading sharply bearish after violating the bearish flag at the 104.680 level. Below this level, we may have more selling trade opportunities. The USD/JPY pair traded with a positive note during the whole Thursday session after a goodish pickup in the U.S. dollar demand. The rebounded U.S. dollar helped currency pair USD/JPY to gain positive traction and move away from the six-week lowest level it touched on Wednesday.

The slow progress in the U.S. stimulus measure package attracted some buying in the greenback that dampened the hopes that financial aid will be delivered before elections. The statement by House of Representatives Speaker Nancy Pelosi that soon there will be pen to paper on the stimulus bill failed to impress investors, and the USD/JPY pair continued moving in the upward direction.

Pelosi even said that the stimulus package could be passed in the House before election day, but investors were somewhat unconvinced that the bill could pass through the Senate due to the strong opposition from Republicans over a bigger stimulus deal. This, in turn, weighed on risk sentiment and supported the Japanese Yen that ultimately capped further upside in the USD/JPY pair prices.

Apart from developments surrounding the U.S. fiscal stimulus, the USD bulls further took clues from the better than expected release of the U.S. initial jobless claims. The number of Americans filed for unemployment benefits declined to 787K during the previous week for the first time against the projected 860K and supported the U.S. dollar. The decline in unemployment claims means less need for a U.S. stimulus package and more strength for the U.S. dollar and USD/JPY pair.

On the data front, the C.B. Leading Index from the U.S. dropped to 0.7% against the expected 0.8% and weighed on the U.S. dollar. The Existing Home Sales advanced to 6.54M in comparison to projected 6.20M and supported the U.S. dollar. Another favorable economic data release gave strength to the U.S. dollar that pushed the USD/JPY pair even higher on grounds. Meanwhile, the rising number of coronavirus cases across the globe and fears for economic recovery due to lockdowns imposed to curb the spread of the virus raised the safe-haven appeal, supported the Japanese Yen, and weighed on the USD/JPY pair to limit its bullish move on Thursday.


The USD/JPY traded dramatically bearish to drop from 105.460 level to 104.349 level. Like other pairs, the USD/JPY has also entered the oversold zone, and now sellers seem to be exhausted. On the higher side, the USD/JPY pair has reversed some of the losses to trade at the 104.700 level. On the higher side, the pair may go after the 38.2% Fibonacci retracement level of 104.900 and 50% Fibo level of 105. Let’s consider taking a buying trade over 104.350 area today. 

Entry Price – Buy 104.593

Stop Loss – 104.993

Take Profit – 104.093

Risk to Reward – 1:1

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

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

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Categories
Forex Market Analysis

Daily F.X. Analysis, October 23 – Top Trade Setups In Forex – European PMI In Highlights! 

The economic calendar is filled with medium impact economic events such as Unemployment Claims, C.B. Leading Index m/m, and Existing Home Sales from the United States on the news front. Besides, the Consumer Confidence from the Eurozone will also remain in the highlights today. The market may show some price action during the U.S. session on the release of U.S. Jobless Claims. 

The economic calendar is filled with medium impact economic events such as Unemployment Claims, C.B. Leading Index m/m, and Existing Home Sales from the United States on the news front. Besides, the Consumer Confidence from the Eurozone will also remain in the highlights today. The market may show some price action during the U.S. session on the release of U.S. Jobless Claims. 

The economic calendar is filled with medium impact economic events such as Unemployment Claims, C.B. Leading Index m/m, and Existing Home Sales from the United States on the news front. Besides, the Consumer Confidence from the Eurozone will also remain in the highlights today. 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 closed at 1.18184 after placing a high of 1.18666 and a low of 1.18111. The EUR/USD pair was down and remained bearish on that day. As the market sentiment deteriorated and the U.S. dollar moved stronger across the board, the EUR/USD pair dropped on a session by 0.3% and remained one of the worst G10 performers on Thursday.

The common currency put an end to a four-day rally on Thursday as the hopes of the next round of U.S. stimulus deal faded away. 

The U.S. President Donald Trump crushed the risk appetite on Thursday after blaming Democrats for not compromising an acceptable agreement. This raised the U.S. dollar on board from its seven-week lowest level. The hopes for the next round of U.S. stimulus package were faded after Trump blamed Democrats that they were unwilling to compromise on the relief aid bill’s size. However, the talks were continuing, and it is uncertain whether a stimulus package is delivered before the Presidential elections or not.

The faded hopes dampened the risk sentiment and added strength to the U.S. dollar that ultimately added weight on the EUR/USD pair on Thursday. Furthermore, the rising number of coronavirus cases in Europe also weighed on the EUR/USD pair. In Europe, the daily number of infections reached record levels, with Spain becoming the first western country to report one million cases. These rising numbers of coronavirus cases from Europe also undermined the Euro currency’s confidence, ultimately added to the losses of the  EUR/USD pair.

On the data front, at 11:00 GMT, the German GfK Consumer Climate came in as -3.1 against the forecasted -2.9 and weighed on Euro currency that added in the losses of EUR/USD pair. At 18:52 GMT, the Consumer Confidence from Europe was also declined to -16 from the projected -15 and weighed on the single currency and added in the losses of EUR/USD pair. From the U.S. side, the Unemployment Claims from last week were dropped to 787K against the projected 860K and supported the U.S. dollar. At 19:00 GMT, the Existing Home Sales also raised to 6.54M against the forecasted 6.20M and supported the U.S. dollar that ultimately weighed on EUR/USD pair.

Apart from macroeconomic data, the European Central bank has also hinted that the Eurozone’s economy was in for a bumpy road ahead. The President of ECB Christine Lagarde also warned about the effects of the second wave of coronavirus on the economy. So, the weak outlook of the Eurozone economy also weighed on EUR/USD pair.

Daily Technical Levels

Support    Resistance

1.1828     1.1889

1.1795     1.1915

1.1768     1.1949

Pivot Point: 1.1855

EUR/USD– Trading Tip

The bullish bias of the EUR/USD has weakened as the pair fell from the 1.1880 level to a 50% Fibonacci retracement level of 1.1805 level. This level’s violation may trigger further selling until the 1.1769 area that marks 61.8% Fibonacci retracement for the EUR/USD. The EUR/USD is likely to exhibit further selling bias today, especially after violating the 1.1770 level to 1.1740 level. The MACD and RSI are also supporting the bearish bias; therefore, bearish bias remains dominant today. The EUR/USD may face resistance around 1.1837 and 1.1880 level today.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.30822 after placing a high of 1.31517 and a low of 1.30704. Overall the GBP/USD pair remained on the downside all through the day. The GBP/USD pair gave up some ground and remained bearish on Thursday amid the broad-based U.S. dollar come back. However, the GBP/USD pair managed to stay in the upper half of its weekly range.

The British Pound fell on Thursday, although the talks between the E.U. & U.K. resumed on the day. The reason could be attributed to the brinkmanship from Britain amid negotiations, risk an accidental no-deal Brexit. On Thursday, the top E.U. Brexit negotiator Michael Barnier arrived in London to intensify talks with his British counterpart David Frost to break the impasse and find a solution to key sticking points, fisheries, and state aid.

The fisheries have long been a debating point in the Brexit negotiations as the U.K. has been determined to control access to its waters after the transition period ends. U.K. has refused to stick with the E.U.’s common fisheries policy that set fishing quotas among the E.U. member states. The transition period has come near to end with just months to go, and the U.K. has refused to allow talks to run past the year-end deadline. According to a spokesman for UK PM Boris Johnson, the time has remained very short as the U.K. has been reportedly clear that any agreement should be placed before the end of the transition period.

The concerns have raised in the market that the U.K.’s strategy to be somewhat tough on talks and deadlines could risk an accidental no-deal Brexit as the end of the year is coming ahead. These concerns weighed on the Sterling and added the GBP/USD pair’s losses on Thursday.

On the data front, the CBI Industrial Order Expectations from the U.K. came in as -34 against the forecasted -50 and supported British Pound. 

However, from the U.S. side, the Unemployment Claims from the previous week declined to 787K against the forecasted 860K and supported the U.S. dollar. The Existing Home Sales also supported the U.S. dollar after rising to 6.54M from the anticipated 6.20M. The positive data from the U.S. exerted pressure on GBP/USD pair on Thursday. Meanwhile, the Bank of England Governor Andrew Bailey told of strong demand to invest in climate change technology. He also sketched a strong demand for green investment. Looking forward, market participants will await the release of PMI for services and manufacturing activities to find a fresh clue about GBP/USD pair.

Daily Technical Levels

Support    Resistance

1.3049     1.3129

1.3021     1.3179

1.2970     1.3208

Pivot point: 1.3100

GBP/USD– Trading Tip

The GBP/USD traded bearishly below the 1.3165 resistance area to trade at the 1.3070 level that marks the 38.2% Fibonacci retracement level for the Sterling. On the further downside, the GBP/USD pair may take another dip until the 61.8% Fibo level of 1.3018 as the MACD is still pointing towards the selling area. At the moment, Sterling’s immediate resistance holds at the 1.3070 mark; however, the closings below this level is supporting the selling bias. Consider opening sell trades below the 1.3100 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.884 after placing a high of 104.921 and a low of 104.474. The movement of the USD/JPY currency pair stayed bullish throughout the day. The USD/JPY pair traded with a positive note during the whole Thursday session after a goodish pickup in the U.S. dollar demand. The rebounded U.S. dollar helped currency pair USD/JPY to gain positive traction and move away from the six-week lowest level it touched on Wednesday.

The slow progress in the U.S. stimulus measure package attracted some buying in the greenback that dampened the hopes that financial aid will be delivered before elections. The statement by House of Representatives Speaker Nancy Pelosi that soon there will be pen to paper on the stimulus bill failed to impress investors, and the USD/JPY pair continued moving in the upward direction.

Pelosi even said that the stimulus package could be passed in the House before election day. Still, investors were somewhat unconvinced that the bill could pass through the Senate due to the strong opposition from Republicans over a bigger stimulus deal. This, in turn, weighed on risk sentiment and supported the Japanese Yen that ultimately capped further upside in the USD/JPY pair prices.

Apart from developments surrounding the U.S. fiscal stimulus, the USD bulls further took clues from the better than expected release of the U.S. initial jobless claims. The number of Americans filed for unemployment benefits declined to 787K during the previous week for the first time against the projected 860K and supported the U.S. dollar. The decline in unemployment claims means less need for a U.S. stimulus package and more strength for the U.S. dollar and USD/JPY pair.

On the data front, the C.B. Leading Index from the U.S. dropped to 0.7% against the expected 0.8% and weighed on the U.S. dollar. The Existing Home Sales advanced to 6.54M in comparison to projected 6.20M and supported the U.S. dollar. Another favorable economic data release gave strength to the U.S. dollar that pushed the USD/JPY pair even higher on grounds.

Meanwhile, the rising number of coronavirus cases across the globe and fears for economic recovery due to lockdowns imposed to curb the spread of the virus raised the safe-haven appeal, supported the Japanese Yen, and weighed on the USD/JPY pair to limit its bullish move on Thursday.

On Thursday, the U.S. Dollar Index measures the greenback against the six currencies’ basket surge by 0.4% to 92.97. The U.S. dollar index fell to its seven-week lowest level at 92.46 on Wednesday but recovered from there on the next day amid a strong U.S. dollar despite the talks for stimulus package continued. However, traders’ focus will now be shifted towards the final presidential debate between President US Donald Trump and his Democratic rival Joe Biden.

Daily Technical Levels

Support    Resistance

104.18     105.35

103.68     106.00

103.02     106.51

Pivot point: 104.84

USD/JPY – Trading Tips

The USD/JPY traded dramatically bearish to drop from 105.460 level to 104.349 level. Like other pairs, the USD/JPY has also entered the oversold zone, and now sellers seem to be exhausted. On the higher side, the USD/JPY pair has reversed some of the losses to trade at the 104.700 level. On the higher side, the pair may go after the 38.2% Fibonacci retracement level of 104.900 and 50% Fibo level of 105. Let’s consider taking a buying trade over 104.350 area today. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Oct 23 – PayPal Enabling Crypto Not as Good as it Sounds; Ethereum Pushes Towards $420

The cryptocurrency sector was mostly consolidating after Bitcoin’s surge, with almost every single cryptocurrency in the top100 ending up in the green. Bitcoin is currently trading for $12,961, representing an increase of 1.21% on the day. Meanwhile, Ethereum gained 5.64% on the day, while XRP gained 2.34%.

The cryptocurrency sector was mostly consolidating after Bitcoin’s surge, with almost every single cryptocurrency in the top100 ending up in the green. Bitcoin is currently trading for $12,961, representing an increase of 1.21% on the day. Meanwhile, Ethereum gained 5.64% on the day, while XRP gained 2.34%.

The cryptocurrency sector was mostly consolidating after Bitcoin’s surge, with almost every single cryptocurrency in the top100 ending up in the green. Bitcoin is currently trading for $12,961, representing an increase of 1.21% on the day. Meanwhile, Ethereum gained 5.64% on the day, while XRP gained 2.34%.

 Daily Crypto Sector Heat Map

If we check out the top 100 cryptocurrencies, Ampleforth gained 19.04% in the past 24 hours, making it the crypto to gain the most in a day. Energy Web Token (17.44%) and Reserve Rights (12.20%) also did great. On the other hand, Filecoin lost 13.57%, making it the most prominent daily loser. It is followed by HedgeTrade’s loss of 8.57% and ABBC Coin’s loss of 8.49%.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance level had decreased slightly since when we last reported, with its value is currently 60.8%. This value represents a 0.4% difference to the downside when compared to when we last reported.

Daily Crypto Market Cap Chart

The crypto sector capitalization has experienced an increase since we last reported. Its current value is $394.96 billion, representing an increase of $4.72 billion compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

While most of the market rejoices Bitcoin’s surge, confirmation of a bull market, and PayPal enabling its users to buy, sell and hold crypto, not everyone is equally happy. Some analysts have pointed out that PayPal will almost certainly bring adoption, but perhaps at a steep price. If the payment processor giant doesn’t get involved in the community and refuses to give private keys to its users, the benefits may not outweigh the setbacks.

With that being said, additional adoption and introduction of Bitcoin to the wider masses is certainly a positive thing.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization stayed strong after yesterday’s push and even gained some more value. The price pushed past $13,000 once again but couldn’t hold the level, which prompted a pullback towards the sub-$13,000 level. However, the $12,870 level has turned to a support level (though it still needs proper confirmation), which is certainly positive.

At the moment, traders should look Bitcoin’s pullback and trade-off of that. However, if Bitcoin manages to push past $13,000 with confidence, traders shouldn’t wait much but rather join in quickly.

BTC/USD 4-hour Chart

Bitcoin’s technical overview has a strong bullish sentiment on longer time-frames (weekly and monthly), while its short-term sentiment is slightly more neutral.

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 between its middle and top Bollinger band
  • RSI is overbought but descending(73.99)
  • Volume is extremely elevated
Key levels to the upside          Key levels to the downside

1: $12,870                                 1: $12,500

2: $13,200                                 2: $12,300

3: $14,000                                  3: $12,000

Ethereum

Ethereum’s push from yesterday was just a weaker iteration of Bitcoin’s push. However, the second-largest cryptocurrency by market cap has pushed further towards the upside on its own today, testing the $415 and $420 levels. While tests towards both levels failed, Ethereum is still very near $415 and may have the opportunity to strike again, or just consolidate near this level.

Traders should pay attention to Ethereum’s pullback towards $400 or push past $415 and trade off of that.

ETH/USD 4-hour Chart

Ethereum’s technicals are slightly confusing, as its 4-hour overview is completely bullish, while its daily overview is neutral-bullish. However, its long term technicals all tilt towards the buy-side.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is far above its 50-period and its 21-period EMA
  • Price is near the top Bollinger band
  • RSI is overbought (75.95)
  • Volume is elevated
Key levels to the upside          Key levels to the downside

1: $415                                     1: $400

2: $420                                     2: $378

3: $435                                      3: $371

Ripple

The fourth-largest cryptocurrency by market cap had a day filled with volatility, ups, and downs. XRP started the day off strong with a push past $0.26 and towards $0.266. However, bulls have reached exhaustion quickly, and bears stepped in, pulling the price back down to $0.257, where XRP is now consolidating.

XRP has a high-resistance zone above $0.26, which we have seen today as well. For this reason, it is much more plausible that XRP will push towards the downside and retest the $0.25 or $0.2454 levels.

XRP/USD 4-hour Chart

XRP’s technicals are extremely bullish on the 4-hour and 1-day chart, while they are tilting towards the sell-side the longer time-frame we choose.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price far above its 50-period EMA and above its 21-period EMA
  • Price is between its middle and top Bollinger band
  • RSI has left the overbought territory (61.12)
  • Volume is elevated
Key levels to the upside          Key levels to the downside

1: $0.26                                     1: $0.2454

2: $0.266                                   2: $0.235

3: $0.2855                                3: $0.227

 

Categories
Forex Videos

Forex Fundamental Analysis For Novices – How To Trade Mortgage approvals!

https://youtu.be/sitawkCidO0

https://youtu.be/sitawkCidO0

 

Fundamental analysis for novices: Mortgage approvals

 

Thank you for joining this Forex academy educational video for novices. In this series, we will be looking at economic data releases by governments around the world, but specifically focusing on Western democracies and whereby this data acts as a barometer of the health of a country’s economy. In this session, we will be looking at mortgage approvals and focusing specifically on the United Kingdom.

If you are new to trading, one of the main reasons that new traders fail is because they are unaware of economic data releases, where governments release information in the form of statistics, which market analysts and traders use to value the health of a country’s economy. Such data causes various levels of impact on the financial markets, which is typically low, medium, or high, and where high impact data can cause a currency pair’s exchange rate to stop in its tracks and reverse, which is often detrimental to a trend and therefore may cause losses. By using an economic calendar, which is offered by most brokers, you will learn to use the data releases to your advantage and know when to trade and when to avoid the markets, especially at such time as high impact data is being released.

The critical components of an economic calendar are the time of the release, the type of event, the day and date, the likely impact that such data will have on the market, which is measured in 3 values, low medium, and high. The actual data will be populated on to the calendar very shortly after the data release and is typically subject to an embargo. The consensus, which is a value of the expected data release, is usually fairly accurate as put together by economists and analysts. And the previous data release which should also be used in conjunction with the consensus as a gauge. The larger the deviation between the actual release and that of the consensus will likely cause more volatility in the market, depending on the expected impact level.

Here we can see that’s on Tuesday the 1st of September 2020 at 9:30 AM BST, Great Britain will release data statistics for mortgage approvals for July, where the impact level is low, and where the consensus is 33.9 k and where the information that was released for June came in at 40.01 k. The data will be simultaneously released with market manufacturing PMI, net lending to individuals and consumer credit, plus M4 money supply.
Therefore, this information will be looked at holistically by traders, and because the manufacturing PMI is a medium impact, potentially there is room for greater volatility than just the information pertaining to mortgage approvals.

Mortgage approval statistics are released by the Bank of England each month and show the number of mortgages approved for July. This acts as a leading indicator for the housing market within the United Kingdom. Higher mortgage approvals mean that the economy is healthier and recovering from the pandemic. The higher the reading, the more positive for the pound, while a low reading is negative and shows that people are not confident with the economy and are therefore not buying homes. As such, this is bad for the pound and could see weakening against other currencies. As mentioned, always look at the whole basket of data releases rather than one single component.

Categories
Forex Fundamental Analysis

Everything About ‘Durable Goods Orders’ Macro Economic Indicator

Introduction

Introduction

Introduction

Industrial production contributes to over 62% of the jobs in the goods production industry. Therefore, any changes in this sector’s production activity bring forth ripple effects into the overall economy. Owing to the significant role that industrial production plays in the economy, the investment goods bought for use in the industrial sector offer invaluable insights into the changes in the sector. Thus, durable goods orders as an economic indicator can be used to signal economic growth and businesses’ and consumers’ sentiment.

Understanding Durable Goods Orders

Durable goods are expensive and long-lasting items that have a lifespan of at least three years. These goods do not depreciate quickly. They include; heavy-duty machinery used for industrial purposes, computers and telecommunication equipment, raw steel, and transport equipment.

Core durable goods are the totality of durable goods, excluding data from transportation and military orders. The transportation equipment is excluded to ensure smoothening out the effects it would have on the durable goods data as a result of one-time large orders of new vehicles.

Durable goods orders data is, therefore, a monthly survey that tracks the purchase of durable goods. This data is used to assess the prevailing trend in industrial activity.

How to use Durable Goods Orders in Analysis

Since durable goods are expensive and long-lasting, their purchase is made on an occasional basis. For analysis reasons, the durable goods orders are treated as capital expenditure. The durable goods orders are used to signal near-term and future economic prospects. Let’s see what this data tells us about the economy.

Firstly, durable goods are heavy-duty machinery whose assembly and manufacture takes a long time. Therefore, the duration from when the assembly line of these goods begins to the time they are delivered to the buyers shows a period of sustained economic activity.

Capital expenditure in the industrial sector has a multiplier effect. The data on durable goods orders implicitly shows the level of activity in the industries along the supply chain of making and delivering these goods. Higher durable goods orders imply higher commercial activities in the relevant industries, while lower durable goods orders show reduced activities. So, what does this data tell us about the economy? Let’s take the example of increasing durable goods orders.

Higher durable goods orders imply that more jobs are created in the assembly lines, manufacturing, and mining. The resultant increase in employment levels leads to improved living standards and an increase in aggregate demand for consumer products in the economy. The increased aggregate demand for discretionary consumer products will force producers in these sectors to scale up their production, leading to more job creation and economic growth. Thus, the increase in durable goods orders can have both a direct and indirect impact on economic growth and the growth of other consumer industries.

Durable goods are used to further the process of production or service delivery. Therefore, the data on durable goods orders can gauge the sentiment of businesses and consumers. It is fair to say that businesses and consumers purchase durable goods when they are convinced that the economy is on an uptrend. Durable goods orders can thus be used as a testament to improving economic conditions and living standards. It follows the logic that businesses would not be scaling their productions or engaging in capital expenditure if they did not firmly believe that the economy is growing and a future increase in their products’ demand.

Due to their expensive nature, the purchase of durable goods heavily relies on credit financing. Thus, an increase in durable goods orders can be used to show that lending conditions are favorable. This willingness of lenders can be taken as a sign of improved liquidity in the banking sector, which in itself shows that the economy is performing well.

When capital expenditures are made, it is to replace the existing technology with a better one. Therefore, an increase in durable goods orders can be seen as businesses upgrading their current production means. Consequently, improved technology leads to efficiency in the production process and service delivery. This efficiency not only applies to improved quality and quantity of output but also in the allocation of factors of production.

Impact on Currency

In the forex market, the central banks’ perceived monetary policy is the primary mover of exchange rates. Forex traders pay close attention to economic indicators to gauge the health of the economy and speculate on the central banks’ policy decisions. Here’s how the durable goods orders can be used to this end.

Higher durable goods orders are associated with higher employment levels, increased wage growth, and steady growth in the aggregate demand and supply in the economy. When this trend is sustained for an extended period, governments and central banks may have to step in with contractionary monetary and fiscal policies to avoid an overly high inflation rate and an overheating economy. Therefore, sustained growth in the durable goods orders can be seen as a precursor to higher interest rates, which leads to the appreciation of the currency.

Conversely, a continuous decline in durable goods orders is an indication that businesses and consumers have a negative sentiment about the future. This sentiment could result from higher levels of unemployment, dropping levels of aggregate demand, or a stagnating economy. To spur economic growth, expansionary fiscal or monetary policies will be adopted. One such policy is lowering interest rates to encourage borrowing by making the cost of money cheap. Thus, a continuous drop in the durable goods orders can be seen to forestall a drop in the interest rates, which depreciates the currency relative to others.

Source of Information related to Durable Goods Orders

The US Census Bureau collates and publishes the data on the US durable goods orders. An in-depth and historical review of the US’s durable goods orders is found at St. Louis FRED. Trading Economics publishes global data on durable goods orders.

We hope you got an understanding of what this Fundamental Indicator is all about. Please let us know if you have any questions in the comments below. Cheers!