Tag: trading

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Forex Basic Strategies

The Best Tools to Trade Pullbacks Effectively

A Pullback is a pause, retracement, or consolidation of a price from the most recent peak during an ongoing trend. The pullback is widely seen as a trading opportunity after the underlying asset experienced a large upside or downside move. For example – Any forex pair is in a strong uptrend, and some healthy news came, and price action dropped back to the most recent support area that indicates the professional traders are booking the profits.

A Pullback is a pause, retracement, or consolidation of a price from the most recent peak during an ongoing trend. The pullback is widely seen as a trading opportunity after the underlying asset experienced a large upside or downside move. For example – Any forex pair is in a strong uptrend, and some healthy news came, and price action dropped back to the most recent support area that indicates the professional traders are booking the profits.

A Pullback is a pause, retracement, or consolidation of a price from the most recent peak during an ongoing trend. The pullback is widely seen as a trading opportunity after the underlying asset experienced a large upside or downside move. For example – Any forex pair is in a strong uptrend, and some healthy news came, and price action dropped back to the most recent support area that indicates the professional traders are booking the profits.

Pullbacks happen all the time, and if you learn how to trade them successfully, it can be a great skill as a trader. Trading the pullback is the easiest way to trade the market, sometimes you will recognize the high probability pullback trades and sometimes extreme volatile pullbacks, and you can enhance your repertoire and find many higher probability trades. If you are new in the market, then pullback trading is a fantastic and easy way to find superior risk-to-reward ratio trades. In this article, we will explore five trading strategies that provide excellent pullback trades.

Pullback Trading Strategies

Two-Legged Pullback To The MA 

Al Brooks popularized the concept of two legs pullback in his price action books. He explained most of the time, price action print two legs to reach the moving average. We backtested his strategy and found out that his techniques work very well in the trending market, but sometimes in the strong trending market, you will only witness one leg.

This is because most market operators are in a hurry to move the market; this may be because of any fundamental news. To filter out all the low probability trades, it is advisable to find a trending market and then wait for the price action to print the two legs towards the moving average, and when all the moves complete, take the buy entry.

The image below represents the buying trade in the EURGBP forex pair. The moving average indicates the buying trend in the currency. Price action pulled back to the moving average, prices responded from the moving average and goes a bit higher and end up printing the second leg. The second leg goes down to the moving average, but the strong buyers smack back up and close above the moving average. Furthermore, the price slows down a bit, and we took buying entry with the stops below the entry, and for taking profit, we choose the brand new higher high.

Candlestick Pattern + MA

This method will use the bullish engulfing candlestick pattern with a moving average to successfully trade the market.

Here we need two ingredients.

  1. Price action pullback to the moving average.
  2. The market forms a bullish engulfing pattern.

First of all, look for the strong trending market and wait for price action to approach the moving average. At this stage, if the price action prints the engulfing pattern,  it’s the right time for you to go for a buy entry. Otherwise, no entries are allowed for you. An  Engulfing Pattern indicates the sellers try to print the brand new lower low, but because of dynamic support of moving average prices pulled back and buyers end up eating all the sellers. As a result, we witnessed the Bullish Engulfing pattern.

The image below represents the buying trade in the EURNZD forex pair. As you can see, at the end of the downtrend, price action goes above the moving average, and we witnessed the engulfing pattern. The trading pattern closed above the moving average, which was a confirmation of buyers came back to the show and were expecting the brand new higher high.

Trendlines + Channel Trading

This one is the simple trading approach, which is not much popular, but it often generates wonderful trading results. First of all, you must draw the trend line to the ongoing trend, and when the price action pulls back enough, then draw the price channel to identify the oversold and overbought area. When price action approaches the trend line as well as the lower line of the price channel, it is an indication to go long.

The image below represents the buying entry in the AUDCHF forex pair. The trend line was the indication that the buyers are leading the show. During the pullback phase, when enough sellers approach the trend line and the lower channel line, it gave the strong buying candle. The reason we got the strong candle is because for the support and resistance trader, the zone was a dynamic support area to go long.

RSI + Stochastic Indicator

In this approach, we are using the two oscillators to trade the pullbacks. Stochastic and RSI both are oscillators, and they both oscillate between the significant levels. In an uptrend, wait for the price action to pull back. When the stochastic and RSI gave the oversold signal, it is a perfect time to go for a brand new higher high.

The image below indicates the buying trade in the AUDCHF forex pair. The pair was overall in an uptrend, and during the pullback, both of the indicators were showing the oversold signals, and the reversal at the oversold area was a great sign to go long. When both oscillators indicate the same sign, there is no point in going for more significant stops. When both oscillators gave the reversal signal at the significant resistance level, that’s a perfect time to close your trade.

Conclusion

All the pullback strategies share the same goal, which is to time the market. The better you master the skill of timing before the take-off, the more profits you will make. If you are a newbie trader, then master these strategies first on the demo and then apply to the live market because trying any of these strategies in the live market is dangerous without having any experience.

So never try anything on the live account. Instead, practice them on demo first and then make a profit on a live account. When you master these strategies, then you can very easily design a pullback strategy for yourself. Whichever strategy fits nicely into your trading approach, master it.

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 23 – Ethereum Exploding as its 2.0 Update Launch Approaches; Crypto Market in the Green

The cryptocurrency sector has spent the weekend being quite volatile as Bitcoin had a flash crash, which brought its price below $18,000, followed by a rally that brought it back above it. The largest cryptocurrency by market cap is currently trading for $18,461, representing an increase of 0.61% on the day. Meanwhile, Ethereum skyrocketed by gaining 8.13% on the day, while XRP gained 0.09%.

The cryptocurrency sector has spent the weekend being quite volatile as Bitcoin had a flash crash, which brought its price below $18,000, followed by a rally that brought it back above it. The largest cryptocurrency by market cap is currently trading for $18,461, representing an increase of 0.61% on the day. Meanwhile, Ethereum skyrocketed by gaining 8.13% on the day, while XRP gained 0.09%.

The cryptocurrency sector has spent the weekend being quite volatile as Bitcoin had a flash crash, which brought its price below $18,000, followed by a rally that brought it back above it. The largest cryptocurrency by market cap is currently trading for $18,461, representing an increase of 0.61% on the day. Meanwhile, Ethereum skyrocketed by gaining 8.13% on the day, while XRP gained 0.09%.

 Daily Crypto Sector Heat Map

Waves 38.43% in the past 24 hours, making it the most prominent daily gainer in the top100. It is closely followed by Horizen’s gain of 31.65% and Numeraire’s 21.56% gain. On the other hand, Terra lost 5.45%, making it the most prominent daily loser. HedgeTrade lost 3.22% while Crypto.com Coin lost 1.65%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has reduced drastically over the course of the weekend, with its value is currently staying at 63.2%. This value represents a 2.9% difference to the downside compared to the value it had on Friday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has increased significantly over the course of the weekend. Its current value is $541.71 billion, representing a $34.48 billion increase compared to our previous report.

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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 has spent the weekend with decently high volatility as its price managed to go from above $18,500 to $17,600 and then back above $18,500 in just one day. While this “flash crash” is behind Bitcoin, the bulls seem to be more and more wary of the new highs, and a retracement before another push towards the upside is quite possible.

Due to many people taking profits and shorting Bitcoin to hedge their portfolios, the largest currency has a hard time going up. However, trading pullbacks in a bull trend is equally as risky. Bitcoin traders would have the most chance of succeeding if they traded only long positions.

BTC/USD 2-hour Chart

Bitcoin’s technicals are semi-divided, with its daily and monthly overviews showing a slight bullish tilt with signs of bears still present. In contrast, the 4-hour and weekly overviews show no signs of bearish presence and are completely bullish.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is above its 50-period EMA and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (51.42)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $18500                                  1: $17,850

2: $19000                                  2: $17,450

3: $19500                                   3: $17,130

Ethereum

Ethereum’s 2.0 version 0 launch is approaching, and Ethereum bulls seem to be back in the game. The second-largest cryptocurrency by market cap broke out of the ascending (red) line and pushed towards the upside, eyeing the $600 resistance level. While the rally was strong, Ethereum bulls started showing exhaustion at $580. With that being said, the move is still not considered over, and there is more opportunity to the upside.

We mentioned on Friday that Ethereum’s downside is quite defined, but that its upside isn’t. With ETH entering territory that was explored only a couple of times, the opportunity for volatility (but also slippage) is increasing.

ETH/USD 4-hour Chart

Ethereum’s 4-hour and daily time-frames are completely bullish, while its longer time-frames (weekly and monthly) are slightly more tilted towards the neutral position.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is far above both its 50-period and its 21-period EMA
  • Price is at its top Bollinger band
  • RSI is extremely overbought (72.01)
  • Volume is above average
Key levels to the upside          Key levels to the downside

1: $600                                     1: $510

2: $630                                     2: $500 

3: $735                                      3: $490

Ripple

The fourth-largest cryptocurrency by market cap has, just like Ethereum, had quite an amazing weekend. XRP continued its rally to the upside that began on Nov 20 and reached as high as $0.49 before starting to consolidate. While consolidating, it has seemingly created a triangle formation that should keep its price at bay before ~80% of the formation is done.

While it is quite unknown how XRP will act right now, all chances are that it will stay within the triangle formation’s bounds for some time, at least.

XRP/USD 1-hour Chart

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

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price is above its 50-period EMA and at its 21-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is neutral (53.65)
  • Volume is above average
Key levels to the upside          Key levels to the downside

1: $0.476                                   1: $0.3328 

2: $0.509                                   2: $0.3244

3: $0.792                                  3: $0.31

 

Categories
Forex Elliott Wave Forex Market Analysis

NZDUSD Reaches a Fresh 90-Day High

The NZDUSD pair ends the last trading week reaching its seventh fresh 90-day range high soaring to 0.69507. This advance brought the Oceanic currency to a close in the extreme bullish sentiment zone. 

The NZDUSD pair ends the last trading week reaching its seventh fresh 90-day range high soaring to 0.69507. This advance brought the Oceanic currency to a close in the extreme bullish sentiment zone. 

The NZDUSD pair ends the last trading week reaching its seventh fresh 90-day range high soaring to 0.69507. This advance brought the Oceanic currency to a close in the extreme bullish sentiment zone. 

Technical Overview

The next chart unveils the NZDUSD pair in its 8-hour timeframe, which shows the market participants’ sentiment in the 90-day high and low range. The figure illustrates the previous 90-day high and low range located at 0.67978 from September 18th. In this regard, the latest rally started on November 02nd created seven fresh 90-day highs.

On the other hand, the EMA(60)-to-Close index shows a bearish divergence that suggests both the bullish trend’s exhaustion and the price’s potential reversion to the moving average. However, a price breakdown and close below the recent lows is needed to confirm the current bullish trend’s correction.

Short-term Technical Outlook

The short-term view of the NZDUSD cross displayed under the Elliott Wave perspective reveals the intraday upward movement advancing in an incomplete Ending diagonal pattern of Minuette degree labeled in blue. Likewise, the advance of the fifth wave in blue should correspond to the ending of the fifth wave of Minute degree identified in black. Nevertheless, the Elliott Wave formation still doesn’t confirm it.

The next4-hour chart reveals the bullish sequence developed by the NZDUSD pair since October 20th when the kiwi found fresh buyers at 0.65555. Until now, the price action advanced in an incomplete upward five-wave sequence, which reached the potential target zone forecasted in a previous analysis.

According to Elliott wave theory, the Ending Diagonal pattern follows an internal sequence subdivided into 3-3-3-3-3 waves. In this context, the previous chart exposes the terminal formation of the bullish impulsive structure advancing in its fifth wave of Subminuette degree labeled in green, which provides two potential scenarios.

  • First Scenario: The price breaks below the base-line that connects the waves ii and iv, confirming the end of the Ending Diagonal pattern and starting a corrective upper degree structure.
  • Second Scenario: The price advances slightly over last Friday’s high and starts to decline below the base-line between waves ii-iv, from where the NZDUSD should begin to develop a correction of upper degree.

In both scenarios, the confirmation of the ending diagonal completion comes from the breakdown and closing below the base-line that connects the end of waves ii and iv.

Finally, the downward scenario will have its invalidation level once the ending diagonal pattern confirms its completion.

Categories
Forex Market Analysis

Daily F.X. Analysis, November 23 – Top Trade Setups In Forex – PMI Figures in Highlights! 

On the news front, eyes will remain on the Manufacturing PMI and Services PMI figures from the Eurozone, the U.K., and the United States. Almost all economic figures are expected to perform better than previous months, perhaps due to a lift of lockdown. Price action will depend upon any surprise changes in the PMI figures.

On the news front, eyes will remain on the Manufacturing PMI and Services PMI figures from the Eurozone, the U.K., and the United States. Almost all economic figures are expected to perform better than previous months, perhaps due to a lift of lockdown. Price action will depend upon any surprise changes in the PMI figures.

On the news front, eyes will remain on the Manufacturing PMI and Services PMI figures from the Eurozone, the U.K., and the United States. Almost all economic figures are expected to perform better than previous months, perhaps due to a lift of lockdown. Price action will depend upon any surprise changes in the PMI figures.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.18563 after placing a high of 1.18906 and a low of 1.18495. Despite vaccine-related optimism and improved risk sentiment in the market, the currency pair EUR/USD dropped on Friday amid the continuous rise in the number of coronavirus cases along with the latest disagreement between the Fed and U.S. Treasury related to the unused funds of emergency lending programs.

On Thursday, U.S. Treasury Secretary Steven Mnuchin sent a letter to Fed’s Chair Jerome Powell and asked him to return the unused funds in five emergency lending programs that will expire in December. Mnuchin claimed that those funds could be used for other purposes by Congress. Mnuhcin also asked Powell to extend the other four emergency credit facilities.

Meanwhile, the U.S. coronavirus situation got worse as November was not still over, but there have been almost 3 million new cases reported. It is about a quarter of all the U.S. cases since the beginning of the pandemic. The U.S. hospitalization rate was getting higher to an alarming level as it was forcing the health care system to reduce care for even non-COVID-19 patients.

Given the coronavirus situation in the U.S., many states announced restrictive measures to control the spread. On the European side, the situation was a bit under control after the strict lockdown measures. However, the old continent’s situation in Europe was far from getting better, and market players were worried that a steep economic downturn would be seen in the last quarter of the year.

These tensions raised the concerns that economic recovery was under pressure and supported the safe-haven appeal that ultimately weighed on the risk perceived EUR/USD pair on Friday. Furthermore, central banks’ calls for another round of stimulus measures to help support the economy started to increase. In response, the Federal Reserve Chairman Jerome Powell has been refrained to give any hint about any action in December whereas, his European counterpart Christine Lagarde has said that a large easing package will be coming in the next meeting. Lagarde’s comments also weighed on the single currency that ultimately added losses in the EUR/USD pair on Friday.

At 12:00 GMT, The German PPI for October remained flat at 0.1% on the data front. At 19:50 GMT, the Consumer Confidence also came in line with the expectations of -18. There was no macroeconomic figure to be released from the U.S., which means the pair EUR/USD was unaffected by any data on Friday.

Meanwhile, the vaccine news from Pfizer and BioNtech that they were going to apply for US FDA approval for emergency authorization use of their vaccine raised the risk sentiment in the market. Combined with this optimism, the other companies, including Moderna, Oxford, the Russian Sputnik V, and China’s Sinovac, also provided updates about the vaccine’s efficacy and supported the market’s risk of improved sentiment that ultimately capped further losses in the EUR/USD pair.


Daily Technical Levels

Support  Resistance

1.1831      1.1898

1.1790      1.1924

1.1764      1.1965

Pivot point: 1.1857

EUR/USD– Trading Tip

The EUR/USD is trading with a bearish bias at the 1.173 level, forming an ascending triangle on the 2-hour timeframe. On the lower side, the pattern supports the EUR/USD pair at 1.1850, and here violation of the 1.1850 level can extend the EUR/USD pair towards the 1.1816 level. On the higher side, a bullish breakout of the 1.1889 level can extend the buying trend until the 1.1924 level. The bullish bias remains dominants today as the MACD and 50 periods EMA support a bullish trend. Let’s consider taking a buying trade over 1.1889 with a take profit of 1.1924 level. 

GBP/USD – Daily Analysis

The GBP/USD pair closed at 1.32891 after placing a high of 1.32977 and a low of 1.32403. GBP/USD remained bullish on Friday amid the latest Brexit optimism and the coronavirus vaccine’s rising hopes. The currency pair remained on the upper track this week as Brexit dominated the scene and supported the British Pound. The coronavirus situation in the U.K. was improving as the U.K. was set to announce a wide easing of coronavirus rules for a week at Christmas.

Next week, Boris Johnson will announce a plan for an easing of rules on Covid, and he also warned that the level of restrictions for the rest of next month would depend on how well the public obey the current lockdown in England that will end on 2nd December. Brexit headlines were, however, contradictory during the week as PM Boris Johnson signaled that the U.K. would prosper without a deal and E.U. officials indicated that talks could collapse. The British press talked about a French compromise on the fisheries issue that a key sticking point in the Brexit deal. After the French compromise on fisheries, the Brexit optimism continued supporting the British Pound and added gains in GBP/USD pair.

Another factor involved in the GBP/USD’s bullish sentiment, Pfizer and BioNtech said that they would apply for approval of emergency use of their vaccine on Friday, which also helped risk sentiment improve and support the British Pound. Following Pfizer, Moderna also said that its vaccine was 94.5% effective in preventing the coronavirus and helped raise the market’s optimism that also supported the GBP/USD pair’s upward trend.

On the data front, at 05:01 GMT, GfK Consumer Confidence remained flat with the forecasted -33. At 12:00 GMT, the Retail Sales from the U.K. for October raised to 1.2% against the expected -0.3% and supported British Pound that added further gains in GBP/USD pair. The Public Sector Net Borrowing declined to 21.6 against the forecasted 31.6B and kept British Pound and added improvements in the currency pair GBP/USD pair.

Meanwhile, in the U.S., the need for a stimulus package increased with the rising coronavirus cases, but Fed Chairman Jerome Powell refrained from giving any hint about further aid in the upcoming December meeting. The hospitalization in the U.S. for coronavirus patients increased to a worse level, forcing many state governors to announce restrictive measures to control the virus’s spread. It weighed on the U.S. dollar and helped GBP/USD pair to post gains on Friday.

Daily Technical Levels

Support   Resistance

1.3211      1.3296

1.3161      1.3331

1.3127      1.3381

Pivot point: 1.3246

GBP/USD– Trading Tip

The GBP/USD continues trading bullish at the 1.3307 level, holding over the 1.3303 support level, supporting the buying trend. The recent bullish engulfing candle on the 2-hour timeframe can lead Sterling further higher until the 1.3368 area. The MACD and RSI have crossed over on the higher side, suggesting further odds of bullish trend continuation. Typically such kind of ascending trend breakout can lead the pair further higher, so let’s consider taking buying trade over the 1.3307 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair closed at 103.823 after placing a high of 103.909 and a low of 103.700. After falling for six consecutive days, the USD/JPY pair posted small gains on Friday amid the reports about the resumption of the U.S. fiscal aid talks. The small uptick in the USD/JPY pair after massive selling in the previous six days could be solely attributed to optimism led by reports that U.S. lawmakers have agreed to resume talks on another coronavirus stimulus package.

The positive sentiment was somehow offset by the U.S. Treasury Secretary Steven Mnuchin’s decision to end some pandemic relief for struggling businesses. This came in after the tensions increased about the potential economic fallout from the continuous rise in new coronavirus cases, which held the U.S. dollar bulls from placing aggressive bets.

Meanwhile, the safe-haven appeal came back in the market after the number of coronavirus cases started to increase in the U.S. On Thursday, the U.S. reported about 185,000 cases of coronavirus in a single day and set a record. The number of hospitalized patients in the U.S. also increased by almost 50% in just the last two weeks that eventually urged many states to impose new restrictions to stop the virus from spreading further.

Meanwhile, the Governor of California imposed a 10 PM curfew in most populated U.S. states that will take effect from Saturday. Moreover, the Centre for Disease Control advised Americans not to travel on Thanksgiving holiday as it would increase the infection rate. These concerns added uncertainty in the market and raised a safe-haven appeal that supported the safe-haven Japanese Yen and capped the USD/JPY pair’s gains on Friday.

There was no macroeconomic data from the U.S. on Friday, and from Japan, at 04:30 GMT, the National Core CPI for the year from Japan remained flat with the anticipations of -0.7%. The macroeconomic data failed to impact on currency pair USD/JPY.

Pfizer and BioNtech announced on Friday that they would apply on the day to the US FDA for approval of emergency use of their vaccine on the vaccine front. This, combined with the other companies, included AstraZeneca and Oxford University’s latest reports of their vaccine’s efficacy, added strength in the risk sentiment, and supported the USD/JPY pair’s gains on Friday.

Daily Technical Levels

Support   Resistance

103.56      104.07

103.38      104.40

103.04      104.58

Pivot point: 103.89

USD/JPY – Trading Tips

The USD/JPY extends its bearish trend below the 104.102 level, consolidating within a narrow trading range 104.102 – 103.650. On the lower side, the USD/JPY pair is likely to find support at the 103.650 level, and violation of this level can also extend further selling bias until 103.227. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.400 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck! 

Categories
Forex Fundamental Analysis

US 10-Year TIPS Auction – Everything About This Macro Economic Indicator

Introduction

For any long-term investment, taking the future rate of inflation into account is paramount. The reason for this is because inflation eats into the expected returns. Thus, if you could find a way to insulate your investments from this, you most definitely will. The goal of any inflation-protected investment is to ensure that you are cushioned from the reduction in the purchasing power.

Understanding the US 10-Year TIPS Auction

TIPS refers to Treasury Inflation-Protected Securities. As the name suggests, these are US government-issued securities meant to provide investors with protection against the effects of inflation.

US 10-Year TIPS are Inflation-Protected treasury bonds issued by the US Department of the Treasury. The principal on these bonds is meant to finance spending activities by the US government and is redeemable after ten years.

TIPS auction refers to the sale of the inflation-protected treasury bonds by the US Department of Treasury. Originally, the 10-Year US TIPS are auctioned twice a year – in January and July. The reopening auctions are done in March, May, September, and November. Thus, these auctions are scheduled every two months.

Discount rate: The percentage difference between the price at which the TIPS is bought at auction and the one at which it can be redeemed.

Maturity: For the US Treasury Inflation-Protected Securities, the maturity period refers to the maximum time an investor can hold the bonds before redemption. These bonds are usually issued with a maturity period of 5, 10, and 30 years from the auction date. Usually, the minimum duration of ownership is 45 days. Therefore, one can choose to sell their TIPS before maturity or hold them until maturity.

How to Buy TIPS

TIPS can only be bought in electronic form. The minimum amount of TIPS one can purchase is $100 and increments of $100 after that. The maximum amount that a bidder can purchase in a single auction is $5 million. During the auction, the interest rate on the TIPS is determined by the competitive buyers.

The competitive bidders usually specify the yield that they are willing to accept. The competitive bidders for TIPS are large buyers such as brokerage firms, investment firms, and banks. The competitive bidders set the yield for the TIPS, which requires one to have an in-depth knowledge of the money markets. Competitive bidders are required to submit the number of TIPS they intend to buy and the return on investment they seek. This return is the discount rate.

Not all competitive bids are accepted at the auction. When the competitive bid is equal to the high yield, less than the full amount wanted by an investor might be accepted. The bid might be entirely rejected if it is higher than the yield accepted during the auction. The non-competitive bidders are regarded as “takers” of the yield set by the winning competitive bidders.

Once the bidding process is over, the treasury distributes the issuance. Let’s say, for example, that in an auction, the US Department of Treasury is auctioning $20 billion worth of TIPS. If the non-competitive bids are worth $5 billion, they are all accepted. The remaining $15 billion is then distributed among the competitive bidders. The lower competitive bids are filled first until the $15 billion is exhausted.

Using the US 10-Year TIPS Auction for Analysis

Since the TIPS’s primary goal is to safeguard against the effects of inflation, the interest rate paid on them can be used as an indicator of possible inflation rates in the future.

Before we explain how the US 10-year TIPS auctions can be used for analysis, here are two things you need to keep in mind.

  • TIPS’s interest rate is paid semi-annually at a fixed rate, which is usually based on the adjusted principal.
  • Whenever inflation rises, the interest rate rises, and when there is deflation, the interest rate drops.

Once TIPS have been auctioned and traded in the secondary market, when inflation in the economy rises, the principal on TIPS increases as well. Thus, the interest rate payable on these TIPS increases as well. During the TIPS’ subsequent issues, the interest rate payable will reflect the prevailing rate of inflation. Furthermore, the discount rate set at the auctions can be used to gauge the level of confidence that investors have in the US economy. The lower discount rate shows that the current investment atmosphere in the economy is risky; hence, investors are willing to take lower returns than risk losing their principal in other markets.

On the other hand, when investors can get better returns in other markets within the economy, they would demand a higher discount rate. Furthermore, when there is deflation in the economy, the principal on the TIPS falls along with the interest rates payable.

Impact on Currency

Theoretically, the auction of the US 10-year TIPS can impact the currency in two ways. By showing the confidence level in the economy and by showing the prevailing rates of inflation.

When the interest rate payable on the TIPS increases, it shows that the levels are increasing. This increase shows that the economy is growing, which is good for the currency. Furthermore, the higher discount rate at auctions implies that investors can get better rates elsewhere in the economy.

Conversely, the currency will depreciate relative to others when TIPS’s interest rate decreases, which implies that there is deflation in the economy. This instance can also play out if discount rates at the auction are at historical lows. It shows that the economy is performing poorly and that investors may not get better returns elsewhere.

Sources of Data

US Department of Treasury is responsible for the auction of the US 10-year TIPS. The data of the latest TIPS auction can be accessed from Treasury Direct. Treasury Direct also publishes data on the upcoming TIPS auction, which can be accessed here.

St. Louis FRED publishes an in-depth series of the US 10-year TIPS.

Source: St. Louis FRED

How US 10-Year TIPS Auction Affects the Forex Price Charts

The most recent auction of the US 10-year TIPS was on September 17, 2020, at 1.00 PM EST. The data on the auction can be accessed at Investing.com. The US 10-Year TIPS auction is expected to have a low impact on the USD, as shown by the screengrab below.

During the recent auction, the rate for the 10-year TIPS was -0.996% compared to -0.930% on the July auction.

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

EUR/USD: Before US 10-Year TIPS Auction on September 17, 2020, 
Just Before 1.00 PM EST  

Before the auction, the EUR/USD pair went from trading in a steady uptrend to a subdued uptrend. The 20-period MA can be seen going from a steep rise to almost flattening as the candles formed just above it.

EUR/USD: After US 10-Year TIPS Auction on September 17, 2020, at 1.00 PM EST

Immediately after the release of the auction data, the pair formed a 5-minute “Doji” candle. Subsequently, the EUR/USD pair continued to trade in the subdued uptrend with candles forming just above an almost flattened 20-period MA.

Bottom Line

From these analyses, we can establish that the US 10-year tips auction has no significant impact on the forex price charts. The reason for this could be because most forex traders do not keep an eye on bond auctions but instead focus on more mainstream indicators like the CPI and GDP.

Categories
Forex Course

177. Simple Guide To Find the ‘Commitment of Traders’ Report

Introduction

Introduction

Introduction

The previous lesson covered what the Commitment of Traders report is. In this lesson, we will focus on how and where you can retrieve the COT report. The COT report is prepared and published every Friday at 3.30 PM ET by the US Commodity Futures Trading Commission. However, you can access the latest report and those from previous issues at the CFTC website.

The CFTC publishes beforehand the release schedule for the COT report. This schedule can be accessed here. The commission also keeps an archive of all past reports. The historical Commitment of Traders reports can be accessed here.

For forex traders, reading through the COT report might seem cumbersome. If you are interested in trading the forex market using the COT report, some economic calendars make available relevant snippets of select speculative net positions from the report. Below is a screenshot from Investing.com showing the latest release of the COT report on September 18, 2020, at 3.30 PM ET.

If you are interested in an in-depth review of the latest Commitment of Traders report, below is a step by step procedure of how to access it.

Step 1: to view the latest COT report, go to the CFTC website.

Step 2: After accessing the CFTC website, the next step is to find the right report for the forex market. The CFTC published multiple Commitment of Traders reports. These reports include markets other than the Chicago Mercantile Exchange that also contain other non-futures derivative contracts.

The COT report that has data on the forex market is the ‘Current Legacy Reports.’ Under the ‘Current Legacy Reports,’ select the formats belonging to the Chicago Mercantile Exchange.  Below is a screengrab of the from the CFTC website.

To access the COT report, select ‘Short Format’ under the ‘Futures Only’ tab.

Alternatively, if you want a more comprehensive report on the future positioning of traders in the financial sector, you should look at the ‘Current Traders in Financial Futures Report.’ Below is a screengrab from the CFTC website showing this section.

Step 3: After opening the ‘ Short Format’ of Chicago Mercantile Exchange section of the COT, the next step is to identify which currency you are interested in.

Although it looks disorganized, searching through the report is relatively easy. Use the ‘search function’ of your browser to bring up the ‘search box.’ Type the currency you want to analyze. In this case, we searched for the CAD. The search results will appear, as shown in the screengrab below.

I hope you found this guide informative. Please let us know if you have any questions in the comments below. Don’t forget to take the below quiz before you go. Cheers!

[wp_quiz id=”89672″]
Categories
Crypto Market Analysis

BTC/USD Weekly Chart Analysis + Possible Outcomes

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

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

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

Overview

Bitcoin has spent the week constantly pushing towards the upside, with its price moving from around $16,500 on Monday all the way up to $19,000 at one point on Saturday. This left Bitcoin holders in a dilemma: should they hold or hedge their investments. Most holders are already satisfied with the BTC movement and don’t want to invest at such a high price, while some are hedging or even selling their funds to take a profit. On the other hand, such a large rally has “invited” the retail market to join in, and they are the majority of the buy force, alongside institutional investors that do not care about the current price and just want to invest every time they have funds available.

While many analysts called for a stronger pullback long before the most recent push, all significant bear-related signals were false.

Technical factors



Bitcoin has continued moving up, supported by the 50-period MA, which has proven as great support, as well as by the ascending (pink dotted) line. On top of that, the largest cryptocurrency by market cap has done a great job pushing through its previous highs and making higher highs/higher lows. If we consider the year-to-date Bitcoin balance on exchanges dropping 18% and institutions being more and more involved, we can almost certainly expect a long-term price increase.

The hash ribbons indicator is showing miner capitulation (ever since Oct 29), sending out a major buy/accumulation signal.

Likely Outcomes

Bitcoin has one main scenario, as well as one supporting scenario that is likely to play out.

1: If Bitcoin manages to hold the so-called pivot zone (18,250-$18,450), it is almost certain to bounce and reach the all-time high level, and possibly even pass it. In that case, longing Bitcoin after it confirms its position above the pivot zone is a great trade, as it has defined targets (target 1 = Bitcoin’s ATH; target 2 = ride the bull wave and continuously take profit until volume dies out) as well as a defined stop-loss target (right below the pivot zone).

If the first scenario plays out, it will most likely play out on the Nov 23rd, as this is when the pivot zone is meeting the ascending support line and (most likely) the 50-period moving average.

2: The second (and a bit less likely) scenario happens when Bitcoin fails to hold the pivot zone, in which case we can expect a price drop to $17,260.

A move that will end up below $17,260 is highly unlikely, simply due to the overall sentiment currently surrounding Bitcoin.

Categories
Forex Assets

Analysing The Costs Involved While Trading The AUD/MXN Exotic Pair

Introduction

Introduction

Introduction

In this exotic forex pair, the AUD represents the Australian dollar, while the MXN – the Mexican Peso. Exotic currency pairs have higher volatility in the forex market when compared to the other major pairs. Here, AUD is the base currency, where MXN is the quote currency. It means that the AUD/MXN exchange rate shows the amount that 1 AUD can buy in terms of MXN. Let’s say that the exchange rate for the AUD/MXN is 15.0346; it means that 1 AUD can be exchanged for 15.0346 MXN.

AUD/HUF Specification

Spread

When you go long in the forex market, you buy the currency pair from your broker at a higher price than when you sell it. The spread in forex is the difference between these two. The spread for the AUD/MXN pair is – ECN: 2 pips | STP: 7 pips

Fees

Some forex brokers charge a commission for every trade on ECN type accounts, depending on the value of the trade. STP accounts do not incur any trading fees.

Slippage

Sometimes when you place a market order, your broker will fill it in with a different price. This is slippage in forex trading; it is caused by increased volatility and the speed at which your broker executes the trade.

Trading Range in the AUD/MXN Pair

The trading range analyzes the spread between the highest and the lowest price movements across multiple timeframes. The trading range analysis ranges from the minimum, average, to the maximum volatility across all timeframes. It is used to assess the potential profitability of a currency pair across all timeframes.

The Procedure to assess Pip Ranges

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

AUD/MXN Cost as a Percentage of the Trading Range

Further analysis of profitability can be aided by analyzing the percentage of the total cost to the volatility. These costs are put in terms of percentages of the volatility on all timeframes.

ECN Model Account costs

Spread = 2 | Slippage = 2 | Trading fee = 1 | Total cost = 5

STP Model Account

Spread = 7 | Slippage = 2 | Trading fee = 0 | Total cost = 9

The Ideal Timeframe to Trade  AUD/MXN Pair

For the AUD/MXN pair, the ideal trading timeframe appears to be the longer timeframes since trading costs are at their lowest here. We notice that the trading costs for the AUD/MXN pair decrease as the timeframes become longer. Also, note that at longer timeframes, the volatility is higher.

For traders wishing to trade the AUD/MXN pair for the shorter-term, timing their trades with when the volatility increases towards the maximum can help. More so, adopting the use of forex limit orders will lower the trading costs by ensuring there are no slippages.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee = 0 + 2 + 1 = 3

Notice how using the forex limit order types reduces the overall trading costs across all timeframes. The maximum trading cost of the AUD/MXN pair, for instance, decreased from 84.75% of the trading range to 50.85%.

Categories
Forex Elliott Wave Forex Market Analysis

GBPJPY Consolidates in the Bearish Sentiment Zone

The GBPJPY cross continues moving by its seventh session in a row in a sideways channel turning in the neutral zone. However, since the last Thursday trading session, the price is consolidating in the bearish sentiment zone.

The GBPJPY cross continues moving by its seventh session in a row in a sideways channel turning in the neutral zone. However, since the last Thursday trading session, the price is consolidating in the bearish sentiment zone.

The GBPJPY cross continues moving by its seventh session in a row in a sideways channel turning in the neutral zone. However, since the last Thursday trading session, the price is consolidating in the bearish sentiment zone.

Technical Overview

 

The following 8-hour chart illustrates the 90-day high and low range, which exposes the market participants’ sentiment. The figure shows the price action moving around the pivot level at 137.877. Nevertheless, the close below the pivot level pulled the price toward the bearish sentiment zone.

Additionally, the strong bearish rejection in the price action decreasing from the extreme bullish sentiment zone of 140.296 toward the pivot level leads to suspect that the intraday upward movement developed on November 09th couldn’t be as strong as it seemed.

On the other hand, both the positive EMA(60) to Price Index and the 200-period moving average moving below the price, leads to the conclusion that the mid-term sentiment remains on the bullish side. In this regard, the short-term sideways channel’s breakdown could confirm the turning bias from bullish to bearish.

Short-term Technical Outlook

The GBPJPY cross short-term view and under the Elliott Wave perspective reveals the sideways progress in an incomplete corrective sequence that corresponds to wave B of Minor degree labeled in green.

The next 4-hour chart illustrates the advance in a broadening structural series that could correspond to a possible double-three pattern that ended once the price topped at 140.315 on November 11th.

If this scenario is correct, then the pair’s action should be advancing in wave C of Minor degree labeled in green. In this context, the GBPJPY cross should confirm the end of its internal corrective wave corresponding to wave (ii) of Minuette degree identified in blue. In this scenario, the bearish pressure could drag the price toward the end of wave A zone located between levels 133.70 and 133.

The alternative count considers the possibility that wave B of Minor degree remains incomplete and the internal structural series corresponds to a triple-three pattern. In consequence, the current downward move would correspond to the second wave ((x)) of Minute degree. If this scenario is valid, the wave (c) of Minuette degree in blue should have a limited decline, likely until the previous lows located between 135 and 134.

Finally, the invalidation level for both short-term scenarios locates at 140.315, which corresponds to the end of wave ((y)) in black.

Categories
Forex Basic Strategies Forex Daily Topic

Trading The Forex Market Like A Pro Using The Williams %R Indicator

Introduction

Introduction

Introduction

In the forex market, the Relative Strength Index (RSI) is the most sought after technical indicator for measuring overbought and oversold conditions in the market. However, there are times when RSI can give misleading signals. To overcome some of these limitations of RSI, we use William’s %R (Williams Percentage Range) to help us identify when an asset is oversold or overbought.

Having determined that the asset has moved too much in one direction, we can position ourselves on the other side of the market after suitable confirmation. In today’s article, let’s discuss a strategy based on William’s %R indicator to identify when the market has become overbought or oversold. Let us first get into the specifications of the strategy.

Time Frame

The strategy works well on higher time frames such as ‘Weekly’ and ‘Daily.’ Therefore, the strategy is suitable for swing and long-term traders.

Indicators

We use the following indicators in the strategy:

  • William’s %R
  • Simple Moving Average (standard setting)

Currency Pairs

The strategy applies to all currency pairs listed on the broker’s platform, including major, minor, and exotic pairs. This is one of the distinguishing features of the strategy.

Strategy Concept

The William’s %R indicator usually ranges between 0 to -100, where a reading of 0 to -20 tells us that the asset is overbought. On the other hand, if %R falls in the range of -80 and -100, the asset is said to be oversold. As with other technical indicators, %R generates accurate trading signals when used in conjunction with other analytical tools such as chart patterns and systems.

Just because an asset may appear overbought and oversold based on the %R, this doesn’t necessarily mean that the price will reverse. Hence, we include a few concepts of the chart pattern and price action to confirm that the reversal is real. The more we wait, the higher the confirmation. But this reduces the risk-to-reward (RR) ratio moderately. This depends more on the type of trader if he is more conservative or aggressive.

In the strategy, we firstly establish a trend that is mostly in the overbought or oversold situation. This means William’s %R should indicate an overbought situation of the market for a major part of the trend during an uptrend. On the other hand, in a downtrend, William’s %R should indicate an oversold market situation for a major part of the trend. When the trend remains in the overbought or oversold condition for most of the time, the reversal tends to be sharp in nature.

This is why the above condition is important for the strategy. Next, we wait for the ‘Bullish Engulfing’ pattern to appear on the price chart, in a reversal of a downtrend. Likewise, in a reversal of an uptrend, we wait for the ‘Bearish Engulfing’ pattern to appear on the chart. This is the first sign of reversal. The reversal is confirmed when the price starts moving above the moving average, in a downtrend, and below the moving average, in an uptrend.

Stop-loss for the trade will be placed below the ‘engulfing’ pattern in a ‘long’ position and above the ‘engulfing’ pattern in a ‘short’ position.

Trade Setup

In order to explain the strategy, we will be executing a ‘long’ trade in EUR/USD currency pair using the below-mentioned rules. Here are the steps to execute the strategy.

Step 1: The first step of the strategy is to identify the major trend of the trend. An easy to determine trend is if the price is below the simple moving average, the market is in a downtrend, and if the price is above the simple moving average, the market is in an uptrend. Here we need to make sure that William’s %R indicates an overbought/oversold market situation for the major part of the trend.

The below image shows an example of a downtrend that is oversold.

Step 2: The next step is to wait for the market to present the ‘Engulfing’ pattern on the chart. In a downtrend, the ‘Bullish Engulfing’ pattern indicates a reversal of the trend, while in an uptrend, the ‘Bearish Engulfing’ pattern indicates a reversal of the trend. If the second of the engulfing pattern closes above the MA in a reversal of the downtrend, the reversal will be more prominent. Similarly, if the second candle closes below the MA in a reversal of the uptrend, the reversal can be resilient.

Step 3: The rule of entering the trade is fairly simple. We enter ‘long’ when the price starts moving further above the moving average after the occurrence of an ‘engulfing’ pattern. Similarly, we enter ‘short’ when the price starts moving further below the moving average after the occurrence of the ‘engulfing’ pattern.

Step 4: Lastly, we need to determine the stop-loss and take-profit for the trade. In a ‘long’ position, stop-loss is placed below the ‘Bullish Engulfing’ pattern. In a ‘short’ position, it is placed above the ‘Bearish Engulfing’ pattern. The take-profit is set at a point where the resultant risk-to-reward (RR) ratio of the trade will be 1.5. However, partial profits can be taken at the opposing ‘support’ and ‘resistance’ levels that might be a hurdle for the price.

In our example, the risk-to-reward (RR) ratio of 1.5 was achieved after a period of one month since traded on the ‘Daily’ time frame.

Strategy Roundup

William’s %R is a very powerful indicator that helps us identify opportunities during a reversal phase of the market. It is important to note that %R should never be used in isolation. Combining the %R indicator with chart pattern, price action, and market trend gives us an edge in the market, which is difficult to get when applied individually. Trade executed using the above strategy can longer than expected to give desirable results since it is based on a higher time frame.

Categories
Forex Market Analysis

Daily F.X. Analysis, November 20 – Top Trade Setups In Forex – Eyes on Retail Sales!

The broad-based U.S. dollar failed to stop its overnight losses and remain bearish on the day mainly due to the mixed U.S. Stimulus story. Moreover, the doubts over the U.S. economic recovery in the wake of coronavirus resurgence also weigh on the U.S. dollar. On the news front, eyes will remain on U.K.’s and Canada’s core retail sales to determine further market trends. 

The broad-based U.S. dollar failed to stop its overnight losses and remain bearish on the day mainly due to the mixed U.S. Stimulus story. Moreover, the doubts over the U.S. economic recovery in the wake of coronavirus resurgence also weigh on the U.S. dollar. On the news front, eyes will remain on U.K.’s and Canada’s core retail sales to determine further market trends. 

The broad-based U.S. dollar failed to stop its overnight losses and remain bearish on the day mainly due to the mixed U.S. Stimulus story. Moreover, the doubts over the U.S. economic recovery in the wake of coronavirus resurgence also weigh on the U.S. dollar. On the news front, eyes will remain on U.K.’s and Canada’s core retail sales to determine further market trends. 

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair managed to stop its previous day losing streak and remain bullish around the 1.1886 level mainly due to the broad-based U.S. dollar selling bias, triggered by the cautious sentiment around the U.S. stimulus story, which ultimately lends support to the currency pair. However, Mnuchin’s call to recollect funds allocated to Federal Reserve, which eventually weighed on the market trading sentiment, failed to provide any support to the greenback as the Republican heavyweight McConnell recently showed readiness to resume the discussions with the Democrats on a new COVID-19 relief package, which ultimately undermined the U.S. dollar. 

That’s very surprising as the U.S. dollar usually draws bids alongside losses in the equities market. On the contrary, the buying interest around the single currency was capped by the intensifying virus fugues in Europe, which eventually becomes the key factor that has been capped further upside in the currency pair. At the moment, the EUR/USD currency pair is currently trading at 1.1888 and consolidating in the range between the 1.1865 – 1.1891.

The equity market has been declining since the day started amid mixed concerns over the U.S. stimulus story. The Mnuchin’s asked the Federal Reserve to return the remaining coronavirus stimulus funds, which could limit the central bank’s capacity to give additional support to businesses at a time when the coronavirus second wave is accelerating. Let me remind you that these funds were meant for global lending to local government, non-profits, businesses. These factors have been weighing on the market trading sentiment, which could be considered as the main factors that cap further downside in the safe-haven U.S. dollar losses.

On the contrary, Republican heavyweight McConnell recently showed a willingness to continue the negotiations with the Democrats on a new COVID-19 relief package. This news is negative for the U.S. dollar, as a stimulus package would have the effect of reducing the U.S. dollar.

As in result, the broad-based U.S. dollar failed to stop its overnight losses and remain bearish on the day mainly due to the mixed U.S. Stimulus story. Moreover, the doubts about the U.S. economic recovery in the wake of coronavirus resurgence also weigh on the U.S. dollar. Thus, the U.S. dollar losses could also be a key factor that kept the currency pair higher. Meantime, the dollar index unchanged at 92.306 (=USD), off Thursday’s low of 92.236, though it is still down 0.3% on the week.

On the bearish side, the intensifying market worries regarding the continuous hike in new coronavirus cases in Europe and the United States keep fueling the doubts over the global economic recovery through imposing back to back lockdown restrictions on economic and social activity, which eventually weighed on the shared currency and becomes the key factor that kept the lid on any additional gains in the currency pair. 

In the absence of significant data/events on the day, the market traders will keep their eyes on the ongoing drama surrounding the U.S. stimulus package. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch for a fresh direction. 

Daily Technical Levels

Support   Resistance

1.1836       1.1880

1.1820       1.1908

1.1791       1.1924

Pivot point: 1.1864

EUR/USD– Trading Tip

On Friday, the EUR/USD is trading with a bearish bias at the 1.1844 level, having violated an upward trendline on the hourly chart. On the lower side, the support stays at 1.1832, and below this, the EUR/USD may find next support at 1.1814. On the higher side, the resistance can be found at the 1.1867 level. The bullish bias remains dominants today as the MACD and 50 periods EMA support a bullish trend. We are already holding a buying trade from yesterday; therefore, you are advised to follow our forex signals page for more updates on the EUR/USD pair. 

GBP/USD – Daily Analysis

During Friday’s European trading session, the GBP/USD currency pair managed to gain positive traction for the second straight session and refresh the intra-day high around closer to 1.3300 level mainly due to the broad-based U.S. dollar fresh weakness, backed by the doubts over the next round of the U.S. fiscal stimulus measures, which eventually undermined the U.S. dollar and contributed to the currency pair gains. 

On the contrary, the worsening coronavirus (COVID-19) conditions in the U.S. and Europe raised the fears of global economic recovery, which could be considered one of the key factors that kept the lid on any additional gains in the currency pair. In the meantime, the gains in the currency pair were also capped by negative Brexit news. At a particular time, the GBP/USD currency pair is currently trading at 1.3275 and consolidating in the range between 1.3247 – 1.3288.

According to the latest report, the European Union (E.U.) prepares for no-deal Brexit plans after the discussions’ dragging. The fears of no-deal Brexit were further bolstered after E.U.’s Chief Negotiator Michel Barnier self-isolated after a member of his team contracted the infection.

Despite the fears of no-deal Brexit and the Sino-American skirmish, not to forget the record single-day increase in COVID-19 cases, the currency pair managed to gain positive traction amid a weaker U.S. dollar. At the USD front, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day as doubts over the U.S. economic recovery remain amid the coronavirus crisis. The losses in the U.S. dollar kept the currency pair higher. Meantime, the dollar index unchanged at 92.306 (=USD), off Thursday’s low of 92.236, though it is still down 0.3% on the week.

In the absence of significant data/events on the day, the market traders will keep their eyes on the ongoing drama surrounding the U.S. stimulus package. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch for a fresh direction. 

Daily Technical Levels

Support    Resistance

1.3155       1.3236

1.3118       1.3280

1.3073       1.3317

Pivot point: 1.3199

GBP/USD– Trading Tip

Most technical levels are the same as Sterling didn’t make any significant change in the market. The GBP/USD pair is trading bullish at the 1.3279 level, holding over the 1.3227 support level, which is extended by an upward trendline on a 2-hour timeframe. The Cable is likely to face immediate resistance at the 1.3297 area, which will be confirmed if the candle starts closing below this level. However, the bullish breakout of the 1.3297 level can drive further upside movement until the 1.3370 level today. 

USD/JPY – Daily Analysis

A day before, the USD/JPY pair was closed at 103.795 after placing a high of 104.207 and a low of 103.650. The currency pair USD/JPY remained bearish for the 5th consecutive session on Wednesday and dragged its prices below the 103.700 level. The USD/JPY pair was extending its losses due to the U.S. dollar weakness on Wednesday despite the latest optimism regarding the coronavirus vaccine. On Wednesday, Pfizer announced that its vaccine was 95% effective in its study and planning to seek authorization within days.

This news added to the market’s risk sentiment and supported the equity market by providing a 0.45% gain to Dow Jones and 0.04% to NASDAQ. The latest news from Pfizer and BioNtech failed to impress the market, and the pair USD/JPY continued following the U.S. dollar’s weakness on Wednesday. The currency pair was under pressure as the coronavirus situation was getting worse day by day in the U.S. as the death toll surpassed 250,000 level in the major economy. According to Johns Hopkins University, the coronavirus has cost almost 250,180 American lives so far, and the count was increasing day by day. This raised fears that more restrictions could be imposed in many states, which would slow down the economic recovery. These fears weighed in the local currency U.S. dollar, and hence, USD/JPY remained under pressure for the 5th consecutive session on Wednesday.

Given the rising number of infections in the country, the States like California and Illinois stretched their restrictions to battle the rising number of cases as any financial aid package was not close to being delivered by Congress. The rising number of coronavirus cases in the U.S. has forced U.S. officials to announce that public schools in New York City will close again on Thursday as the city has reached a 3% coronavirus test positivity rate. These fears also kept the U.S. dollar under pressure on Wednesday.

The House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer urged the Senate Majority Leader Mitch McConnell to resume talks related to the coronavirus relief package. However, McConnell was insisting on a targeted package. The U.S. dollar came under further pressure after the hopes for the talks for further stimulus package increased and weighed on the USD/JPY pair.

On the data front, at 02:00 GMT, the TC Long Term Purchases surged to 108.9B from the expected 41.5B and supported the U.S. dollar. At 18:30 GMT, the Building Permits for October came in line with the projections of 1.55M. The Housing Starts rose to 1.53M from the expected 1.45M and supported the U.S. dollar that ultimately capped further losses in the USD/JPY on Wednesday. On the Japanese side, the Trade Balance for October raised to 0.31T against the 0.11T and supported the Japanese Yen that added further pressure on the USD/JPY pair on Wednesday.

Daily Technical Levels

Support    Resistance

103.58       104.16

103.32       104.48

102.99       104.74

Pivot point: 103.90

USD/JPY – Trading Tips

The USD/JPY extends its bearish trend below the 104.430 level, falling from the 104.850 support area. On the lower side, the USD/JPY pair is likely to find support at the 103.800 level, and violation of this level can also extend further selling bias until 103.227. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.400 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck! 

Categories
Forex Elliott Wave Forex Market Analysis

Is NZDJPY ready for a New Upward Move?

The Elliott Wave perspective of the NZDJPY pair reveals it is moving in an incomplete impulsive sequence that began on March 18th when the price found fresh buyers at 59.49.

The Elliott Wave perspective of the NZDJPY pair reveals it is moving in an incomplete impulsive sequence that began on March 18th when the price found fresh buyers at 59.49.

The Elliott Wave perspective of the NZDJPY pair reveals it is moving in an incomplete impulsive sequence that began on March 18th when the price found fresh buyers at 59.49.

Elliott Wave Landscape

In its 12-hour chart, NZDJPY is seen progressing in its fifth wave of Minute degree labeled in black. Its internal structure reveals a sideways action corresponding to the fourth wave of Minuette degree identified in blue. Looking at this context, the cross would likely develop a new upward movement, which should correspond to the fifth wave of Minuette degree of the fifth wave of Minute degree,  following the Elliott Wave theory.

In this regard, the next movement corresponding to the fifth wave in blue of the fifth wave in black should be a terminal move. However, this potential sequence will not necessarily be an ending diagonal pattern.

On the other hand, as exposed in the previous chart, the third wave of Minute degree corresponds to the extended movement of the complete impulsive sequence of Minute degree. Therefore, under the EW rules, the fifth wave cannot be an extended move.

Finally, considering that the fifth wave doesn’t reveal a reversal formation, the current uptrend is likely to continue mostly bullish.

Short-term Technical Outlook

The short-term Elliott wave outlook for the NZDJPY cross displayed in the following 4-hour chart reveals the incomplete internal sequence that currently appears advancing in its fourth wave of Minuette degree identified in blue. At the same time, the corrective wave in progress is running in wave b of Subminuette degree labeled in green.

Once NZDUSD completes its wave b (labeled in green), it could develop a new decline corresponding to wave c. This intraday downward movement, subdivided into five internal segments, could fail below the latest lows, with its potential support on 71.411, where the NZDJPY cross could find fresh buyers expecting to boost its price toward the potential target zone located between 72.569, even till the psychological barrier at 73.002. This likely decline could be a “bear trap,” the big market participant could use to incorporate their long positions.

On the other hand, looking back in our first 12H chart, considering that the third wave is the extended wave,we can perceive two potential scenarios for the wave (v), in blue.

  • Scenario 1: Wave (v) doesn’t surpass the end of wave (iii) located at 72.791 and starts to decline, unveiling the bearish pressure for the cross. In this case, the price likely would pierce and close below level 71.411.
  • Scenario 2:  Wave (v) exceeds the end of wave (iii). In this case, the bullish pressure continues; therefore, the cross retracement could find support above the recent low located at 71.51.

Finally, the invalidation level corresponding to the intraday bullish scenario is 70.511, corresponding to the end of wave (i) identified in blue.

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 20 – Bitcoin Conquering $18,000: What’s Next in Store?

The cryptocurrency sector has ended up with the majority of cryptos in the green as Bitcoin continued its rally past $18,000. The largest cryptocurrency by market cap is currently trading for $18,095, representing an increase of 1.31% on the day. Meanwhile, Ethereum gained 1.59% on the day, while XRP gained 2.42%.

The cryptocurrency sector has ended up with the majority of cryptos in the green as Bitcoin continued its rally past $18,000. The largest cryptocurrency by market cap is currently trading for $18,095, representing an increase of 1.31% on the day. Meanwhile, Ethereum gained 1.59% on the day, while XRP gained 2.42%.

The cryptocurrency sector has ended up with the majority of cryptos in the green as Bitcoin continued its rally past $18,000. The largest cryptocurrency by market cap is currently trading for $18,095, representing an increase of 1.31% on the day. Meanwhile, Ethereum gained 1.59% on the day, while XRP gained 2.42%.

 Daily Crypto Sector Heat Map

SushiSwap 31.66% in the past 24 hours, making it the most prominent daily gainer out of the top100 cryptos ranked by market capitalization yet again today. It is closely followed by Waves’ gain of 21.42% and CyberVein’s 17.06% gain. On the other hand, Blockstack lost 8.00%, making it the most prominent daily loser. NEM lost 7.73% while ABBC Coin lost 6.77%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has reduced slightly over the course of the day, with its value is currently staying at 66.1%. This value represents a 0.2% difference to the downside 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 $507.23 billion, representing a $12.16 billion increase compared to our previous report.

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What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market cap has spent the past 24 hours pushing towards and past the $18,000 level after it has won the fight for $17,850. While the move was quite sudden at one point, it was actually not accompanied by a great increase in volume. This has ultimately caused BTC to end its move slightly above $18,200 and start its consolidation phase.

Due to many people taking profits and shorting to hedge their portfolios, Bitcoin has a hard time going up. However, trading pullbacks is equally as risky. Bitcoin traders would have the most chance of success if they traded only pushes to the upside, accompanied by a decent volume increase.

BTC/USD 1-hour Chart

Bitcoin’s technicals on the 4-hour, daily, and monthly time-frame are all bullish but show some signs of neutral presence. On the other hand, its weekly overview is tilted towards the buy-side and doesn’t show any bearishness.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is above both its 50-period EMA and its 21-period EMA
  • Price is near its top Bollinger band
  • RSI is neutral (57)
  • Volume is slightly below average
Key levels to the upside          Key levels to the downside

1: $18500                                  1: $17,850

2: $19000                                  2: $17,450

3: $19500                                   3: $17,130

Ethereum

Our yesterday’s call for Ethereum traders was that they should wait for the cryptocurrency to confirm its support level or fall under it, and then trade “with the wave.” Ethereum confirmed its position above the yellow dotted line (top line of the ascending channel) and pushed up instantly. The move brought Ether from $470 all the way to $488 before slowing down and starting to consolidate.

While Ethereum’s downside is quite defined, its upside isn’t. Traders should be wary of Ether’s future pushes to the upside, while they should trade any pullback from the retest of the yellow line.

ETH/USD 1-hour Chart

Ethereum’s 4-hour, daily and monthly time-frames are extremely bullish and show no signs of neutrality or bearishness. On the other hand, its weekly overview is still titled to the bull side but does show significant neutrality.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is above both its 50-period and its 21-period EMA
  • Price is near its top Bollinger band
  • RSI is neutral after bouncing from almost being overbought(59.32)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $490                                     1: $470

2: $500                                     2: $451 

3: $510                                      3: $445

Ripple

The fourth-largest cryptocurrency by market cap has spent the day breaking out of its slow price descent and pushing towards the upside. XRP first changed its price direction at $0.284 and quickly pushed towards the upside, reaching as high as $0.306. However, that price did not hold up, and XRP started trading sideways around the $0.3 mark.

XRP traders should still be safe to trade within the range bound by $0.2855 and $0.31. However, since the range is quite large, traders would be even better if they could spot additional small buy/sell walls in the order books before blindly trading.

XRP/USD 1-hour Chart

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

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price is above its 50-period EMA and at its 21-period EMA
  • Price is near its middle Bollinger band
  • RSI is neutral (53.74)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $0.31                                     1: $0.28 

2: $0.3244                                 2: $0.27

3: $0.3328                                3: $0.266

 

Categories
Forex Videos

How To Make Easy Profits Trading Forex Using Bollinger Bands & Trend Lines!

https://youtu.be/LUCZwwTeRFo

https://youtu.be/LUCZwwTeRFo

Forex Tips For Beginners – Stacking The Odds In Your Favour!

Thank you for joining this Forex academy educational video.

In this session, we will be looking at how to tilt the odds in your favour by showing you some cool tips to keep you out of trouble and tilt the odds in your favour of making successful trades.

The forex market runs 24-hours a day, 5 days a week, but typically, the busiest times, where you might expect a spike in volatility and larger price movements, is during the first hour of the beginning of a particular regional session. So, for example, at around 7:30-8:30 AM GMT, the European and UK session starts, and the FX market will usually become more active as more cash volume flows into the market. The same applies to the US session and then the Asia session as led by Sydney and followed by Japan.
Often trends will finish in one region and turn in the direction as the new region opens. This is down to differences of opinion, economic data releases, sentiment, and profit-taking as one region retires for the night. Wait until such times as the new trading session is well underway and until you can identify a potential trend.

Become a master of Bollinger bands. This technical analysis tool was invented by John Bollinger in the 1980s.

It is a chart tool that calculates two standard deviations on either side of the exchange rate, but it’s used in many different asset classes such as stocks and shares because of its success and the fact that it is highly regarded by the trading community.

One of the key components that traders look for when trading Bollinger bands is that 95% of trading activity will remain within the bands. And shown here on this one hour chart of the USDJPY pair where we have highlighted a few examples of what has happened when the price has a move outside of the bands, traders push the pair back inside, and this often results in a price action reversal.

Another major tool traders use are trendlines. A trendline is typically manually drawn onto a chart to identify price action direction. Again, using the 1-hour chart of the USDJPY pair, we have drawn in some trendlines.
An area of support and resistance, which forms the basis of a trend, is officially recognised when price action has reverted to either the support or resistance trendline on a minimum of two occasions. Here on the left side of the chart, this is clearly the case.
Three distinct trends become apparent using this technical analysis feature.

In this diagram, we have overlaid the Bollinger bands with our trendlines. Again, this is the same USDJPY pair and 1-hour time frame.

Now we can wait until a trend has been confirmed, where price action has hit either the support or resistance line on two occasions, and then we can also wait for the price action to breach the Bollinger band to increase our odds of the price action being driven back into the bands.

At position A, we have a confirmed downtrend, but where price action does not breach the Bollinger, yet it still moves higher.
At position B, we have a change in trend direction as confirmed here on the chart, but where the resistance line breach and also the breach of the Bollinger band cannot be considered as a confirmation of a reversal until such time as price action has fallen underneath the resistance line, which it clearly does. This is the time to short the pair. And, at the bottom of this move, we have a breach of the Bollinger band and where price action finds support before moving higher, which is the time to cut the short position and buy the pair.

In conclusion, use the trendlines and Bollinger bands together in this fashion to increase your odds of a successful winning trade.

Categories
Forex Elliott Wave Forex Market Analysis

Is EURGBP Ready for an Elliott Wave Rally?

Technical Overview

Technical Overview

Technical Overview

The EURGBP cross develops an incomplete Elliott wave correction of Minor degree labeled in green, which began on September 03rd when the price found fresh buyers at 0.88658 and rallied until 0.92916, in where the cross completed its wave A in green. 

The following 4-hour chart illustrates wave B completion.  We see that its internal structure looks like a double-three pattern. This second leg started on 0.92916 on September 11th and ended on November 11th when the price found fresh buyers that boosted the cross in a move that looks like an impulsive intraday rally.

According to the Elliott Wave theory, the double-three pattern is a complex correction that follows an internal structure subdivided into 3-3-3. Likewise, in a corrective formation subdivided into three-wave movements, the segment corresponding to wave C should hold five segments inside it.

On the other hand, considering the Elliott wave theory’s alternation principle, the price likely could advance in an aggressive rally after an extended complex movement.

The cross is advancing in its wave ((ii)) of Minute degree labeled in black that belongs to wave C of Minor degree. In this context, the descending channel’s upper line’s breakout would confirm the potential bullish continuation of wave (iii).

Short-term Technical Outlook

The next 4-hour chart shows the second wave of Minute degree’s internal corrective structure, which could be advancing in its wave (c) of Minuette degree labeled in blue. 

From the previous chart, if the cross finds support in the demand zone located between 0.8917 and 0.8901, opens the likelihood of a new rally corresponding to wave ((iii)), which could advance toward the first supply zone between 0.9126 and 0.91464. The next potential target zone resides between 0.9200 and 0.9218.

On the other hand, both the breakout of the intraday descending trendline that connects the end of waves ((i)) in black and (b) in blue and the surpassing of the end of wave ((i)) will confirm the advance in wave ((iii)) of Minute degree.

Finally, the bullish turning scenario’s invalidation level locates at 0.88610, which corresponds to the origin of wave ((i)).

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 19 – Ethereum 2.0 Most Likely Not Launching on Time; Crypto Sector Consolidating

The cryptocurrency sector has spent the day trying to consolidate after Bitcoin finished its rally. However, while most cryptocurrencies moved less than 1%, almost every one of them ended up in the red. The largest cryptocurrency by market cap is currently trading for $17,708, representing a decrease of 0.73% on the day. Meanwhile, Ethereum lost 0.49% on the day, while XRP lost 1.53%.

The cryptocurrency sector has spent the day trying to consolidate after Bitcoin finished its rally. However, while most cryptocurrencies moved less than 1%, almost every one of them ended up in the red. The largest cryptocurrency by market cap is currently trading for $17,708, representing a decrease of 0.73% on the day. Meanwhile, Ethereum lost 0.49% on the day, while XRP lost 1.53%.

The cryptocurrency sector has spent the day trying to consolidate after Bitcoin finished its rally. However, while most cryptocurrencies moved less than 1%, almost every one of them ended up in the red. The largest cryptocurrency by market cap is currently trading for $17,708, representing a decrease of 0.73% on the day. Meanwhile, Ethereum lost 0.49% on the day, while XRP lost 1.53%.

 Daily Crypto Sector Heat Map

OKB gained 17.77% in the past 24 hours, making it the most prominent daily gainer out of the top100 cryptos ranked by market capitalization yet again today. It is closely followed by yearn.finance’s gain of 12.48% and SushiSwap’s 11.73% gain. On the other hand, Band Protocol lost 10.00%, making it the most prominent daily loser. Ampleforth lost 9.81% while Aragon lost 7.26%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has stayed at exactly the same place over the course of the day, with its value is currently staying at 66.3%. This value represents no difference when compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has stayed at the same place over the course of the day. Its current value is $495.07 billion, representing a $3.01 billion decrease compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

While it may seem that Bitcoin has had a pretty slow and uneventful day, that is certainly not the case. The largest cryptocurrency by market cap has spent the past 24 hours fighting for the $17,850 level and constantly going over and under it. However, the battle is finished, and BTC remains below $17,850 for the time being.

Many traders and analysts are warning BTC traders of a potential triangle formation forming. They also advise traders to refrain from trading until BTC chooses a clear direction.

BTC/USD 1-hour Chart

Bitcoin’s technicals on the daily, weekly, and monthly time-frame are all bullish but show signs of neutral presence. On the other hand, its 4-hour overview is tilted towards the buy-side and doesn’t show any bearishness.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is slightly above its 50-period EMA and below its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (44.71)
  • Volume is slightly below average
Key levels to the upside          Key levels to the downside

1: $18500                                  1: $17,850

2: $19000                                  2: $17,450

3: $19500                                   3: $17,130

Ethereum

Ethereum has established itself above the top line of the ascending channel (yellow dotted line) and is now trading within a new range, bound by the yellow line as support and a new ascending trend line as resistance. Ethereum’s price seems to be in a correction phase at the moment, so we can expect a retest of the yellow line as well as a possible sharp move afterward.

Ethereum traders should wait for the cryptocurrency to confirm its support level or fall under it, and then trade “with the wave.”

ETH/USD 1-hour Chart

Ethereum’s time-frames are slightly tilted towards the buy-side, with its daily overview showing slight bear presence, while its 4-hour and weekly overviews are showing slight neutrality. On the other hand, its monthly overview is completely bullish.

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 between its middle and bottom Bollinger band
  • RSI is neutral (41.77)
  • Volume is slightly below average
Key levels to the upside          Key levels to the downside

1: $490                                     1: $470

2: $500                                     2: $451 

3: $510                                      3: $445

Ripple

The fourth-largest cryptocurrency by market cap had another day of slowly marching towards the downside. However, the extremely low volume may be suggesting that the current price movement is a “calm before the storm,” and that a new big move is coming. Analysts are calling for another push towards the upside. Still, a move down is just as likely with the current state of the sector (the crypto sector is currently in a consolidation/correction phase).

XRP/USD 1-hour Chart

XRP’s daily and weekly overviews are completely bullish and show no signs of neutrality or bearishness. On the other hand, its 4-hour and monthly overviews show slight neutrality.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price is below both its 50-period EMA and its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is pushing towards being oversold (39.45)
  • Volume is below average
Key levels to the upside          Key levels to the downside

1: $0.31                                     1: $0.28 

2: $0.3244                                 2: $0.27

3: $0.3328                                3: $0.266

 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 19 – Top Trade Setups In Forex – U.S. Jobless Claims in Focus! 

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 Current Account 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 Current Account 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 Current Account 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 pair was closed at 1.18539 after placing a high of 1.18908 and a low of 1.18491. The EUR/USD pair dropped on Wednesday after placing gains for four consecutive days. The EUR/USD pair remained on an upbeat track last days amid the market sentiment’s risk-on market sentiment due to the vaccine optimism. The riskier currencies gathered strength against the safe-havens like the USD and posted gains over the last week. However, on Wednesday, the EUR/USD pair started to decline as Europe’s lockdown situation started to raise fears for economic recovery.

However, the second wave of the coronavirus in Europe started to show signs of slowing. The latest numbers showed a stabilization in new cases in Germany, Spain, Italy and a decline in Belgium, France, and the Netherlands. Despite this, the experts have warned that it was too early to get complacent. The lockdowns and tough social restrictions were reintroduced across numerous European countries in October due to the increased spread of the second wave of coronavirus. These restrictions have been placing a threat on European nations’ economic recovery and weighed on Euro currency that has dragged the EUR/USD pair down on Wednesday.

On the data front, at 02:00 GMT, the TC Long Term Purchases from the U.S. raised to 108.9B against the forecasted 41.5B and supported the U.S. dollar that ultimately added losses in the EUR/USD pair. At 18:30 GMT, the Building Permits from October remained flat with the anticipations of 1.55M. The Housing Starts were raised to 1.53M from the projected 1.45M and supported the U.S. dollar that weighed on EUR/USD pair on Wednesday.

From the European side, at 15:00 GMT, the Final CPI for the year came in line with the expectations of -0.3%. The Final CPI for the year also remained flat as expected, 0.2%. European data failed to impact the EUR/USD pair on Wednesday, and the pair continued following the U.S. dollar’s movement.

The losses in the EUR/USD pair were limited after the risk sentiment was improved in the market due to the latest optimism regarding the coronavirus vaccine. Pfizer and BioNtech announced that they would be filing for emergency authorization of their vaccine in the coming days from the U.S. This raised the optimism that vaccines will soon be available in the market, and the chaos will be lifted from the economy, and it will start to recover. The riskier currency Euro gained traction and capped further losses in the EUR/USD pair on Wednesday.

Daily   Technical Levels

Support Resistance

1.1836      1.1880

1.1820      1.1908

1.1791      1.1924

Pivot point: 1.1864

EUR/USD– Trading Tip

The EUR/USD is trading with a bearish bias at the 1.1844 level, having violated an upward trendline on the hourly chart. On the lower side, the support stays at 1.1832, and below this, the EUR/USD may find next support at 1.1814. On the higher side, the resistance can be found at the 1.1867 level. The bullish bias remains dominants today as the MACD and 50 periods EMA support a bullish trend. We are already holding a buying trade from yesterday; therefore, you are advised to follow our forex signals page for more updates on the EUR/USD pair. 

GBP/USD – Daily Analysis

The GBP/USD closed at 1.32670 after placing a high of 1.33120 and a low of 1.32410. The pair GBP/USD continued its bullish momentum for the 4th consecutive day on Wednesday and reached near 1.33200 level. The latest rise in the GBP/USD pair was driven by the growing hopes that a Brexit deal could be within reach after the French President Emmanuel Macron was ready to cave in on demands from the U.K. for full sovereignty waters that will likely rein in access for French fishermen.

This news raised hopes for a Brexit deal before the end of the transition period and supported the British Pound that ultimately lifted the GBP/USD pair higher on board. The Irish Minister Micheal Martin also said that a landing zone for an agreement was within sight just a day ahead of the European Union Summit when the E.U. Brexit negotiator Michel Barnier will brief E.U. leaders about the two weeks of talks held with the U.K.

Chances are increased that an agreement will be made as soon as Monday and will be approved within a week, most likely at the next E.U. Summit on December 10. After that, the European Parliament would have to rubberstamp the agreement to ensure a deal was placed before the end of the transition period on Dec.31st.

All these hopes lifted the British Pound as the chances of a deal were clear for the first time, and things were going in favor of the U.K. However, analysts were concerned that inflation was likely to slow in the months ahead. The GBP/USD pair picked up its pace towards an upward direction due to renewed Brexit optimism and reached near 1.3200 level on Wednesday. On the data front, At 12:00 GMT, the Consumer Price Index for the year raised to 0.7% from the expected 0.5% and supported the Sterling. The year’s Core CPI also raised to 1.5% against the anticipated 1.3% and supported British Pound. The RPI from the U.K. also rose to 1.3% from the expected 1.2% and supported British Pound that ultimately added further gains in GBP/USD pair. At 12:02 GMT, the PPI Input for October surged to 0.2% against the expected 0.0% and supported the British Pound. At the same time, the PPI Output in October remained flat with the expectations of 0.0%. The Housing Price Index from the U.K. also surged to 4.7% against the forecasted 2.9% and supported the British Pound.

The U.K.’s positive macroeconomic data supported the British Pound against the U.S. dollar and raised the GBP/USD pair on Wednesday.

While from the U.S. side, at 02:00 GMT, the TC Long Term Purchases rose to 108.9B against the anticipated 41.5B and supported the U.S. dollar. At 18:30 GMT, the Building Permits for October remained flat with the projections of 1.55M. The Housing Starts surged to 1.53M from the anticipated 1.45M and supported the U.S. dollar that ultimately capped further gains in GBP/USD pair on Wednesday.

Meanwhile, the Bank of England’s Chief Economist Andy Haldane said that the economic outlook for 2021 was materially brighter than he had expected just a few weeks ago despite the short-term uncertainty from a renewed coronavirus lockdown in England. He said that Britain’s economy shrank by almost 20% in the second quarter of 2020, more than any other peer economy, and at the end of September, it was still 8.4% smaller than a year before. He struck a somewhat positive note in line with his previous assessments of Britain’s recovery on Wednesday that raised the British Pound on board against the U.S. dollar. This also benefited the GBP/USD pair on Wednesday, and hence, the pair ended its day with a bullish candle.

Daily Technical Levels

Support   Resistance

1.3155      1.3236

1.3118      1.3280

1.3073      1.3317

Pivot point: 1.3199

GBP/USD– Trading Tip

The GBP/USD pair is trading bullish at the 1.3279 level, holding over the 1.3227 support level, which is extended by an upward trendline on a 2-hour timeframe. The Cable is likely to face immediate resistance at the 1.3297 area, which will be confirmed if the candle starts closing below this level. However, the bullish breakout of the 1.3297 level can drive further upside movement until the 1.3370 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 103.795 after placing a high of 104.207 and a low of 103.650. The currency pair USD/JPY remained bearish for the 5th consecutive session on Wednesday and dragged its prices below the 103.700 level. The USD/JPY pair was extending its losses due to the U.S. dollar weakness on Wednesday despite the latest optimism regarding the coronavirus vaccine. On Wednesday, Pfizer announced that its vaccine was 95% effective in its study and planning to seek authorization within days.

This news added to the market’s risk sentiment and supported the equity market by providing a 0.45% gain to Dow Jones and 0.04% to NASDAQ. The latest news from Pfizer and BioNtech failed to impress the market, and the pair USD/JPY continued following the U.S. dollar’s weakness on Wednesday.

The currency pair was under pressure as the coronavirus situation was getting worse day by day in the U.S. as the death toll surpassed 250,000 level in the major economy. According to Johns Hopkins University, the coronavirus has cost almost 250,180 American lives so far, and the count was increasing day by day. This raised fears that more restrictions could be imposed in many states, which would slow down the economic recovery. These fears weighed in the local currency U.S. dollar, and hence, USD/JPY remained under pressure for the 5th consecutive session on Wednesday.

Given the rising number of infections in the country, the States like California and Illinois stretched their restrictions to battle the rising number of cases as any financial aid package was not close to being delivered by Congress. The rising number of coronavirus cases in the U.S. has forced U.S. officials to announce that public schools in New York City will close again on Thursday as the city has reached a 3% coronavirus test positivity rate. These fears also kept the U.S. dollar under pressure on Wednesday.

The House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer urged the Senate Majority Leader Mitch McConnell to resume talks related to the coronavirus relief package. However, McConnell was insisting on a targeted package. The U.S. dollar came under further pressure after the hopes for the talks for further stimulus package increased and weighed on the USD/JPY pair.

On the data front, at 02:00 GMT, the TC Long Term Purchases surged to 108.9B from the expected 41.5B and supported the U.S. dollar. At 18:30 GMT, the Building Permits for October came in line with the projections of 1.55M. The Housing Starts rose to 1.53M from the expected 1.45M and supported the U.S. dollar that ultimately capped further losses in the USD/JPY on Wednesday. On the Japanese side, the Trade Balance for October raised to 0.31T against the 0.11T and supported the Japanese Yen that added further pressure on the USD/JPY pair on Wednesday.

Daily Technical Levels

Support   Resistance

103.58      104.16

103.32      104.48

102.99      104.74

Pivot point: 103.90

USD/JPY – Trading Tips

The USD/JPY extends its bearish trend below the 104.430 level, falling from the 104.850 support area. On the lower side, the USD/JPY pair is likely to find support at the 103.800 level, and violation of this level can also extend further selling bias until 103.227. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.400 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck! 

Categories
Forex Market Analysis

AUDUSD Prepares for Employment Data Ahead

Market Overview

Market Overview

Market Overview

The AUDUSD pair during the overnight trading session will be driven by October’s employment data, to be released by the Australian Bureau of Statistics in a few hours. The analysts’ consensus expects an increase of 7.1% in the unemployment rate (YoY), representing a deterioration in the labor market conditions and a rise over the 6.9% reported in September.

The unemployment rate jumped from 5.1% in January to 7.5% in August during the current year. In this context, the Governor of the Reserve Bank of Australia (RBA), Philip Lowe, confirmed the change in the focus from inflation rate to labor market conditions, which according to Governor Lowe, would face “an extended period of higher unemployment than we have become used to.”

On the other hand, the next 8-hour chart illustrates the market participants’ sentiment unveiled by the 90-day high and low range, where the price action looks testing the extreme bullish sentiment zone support located at 0.73009.

Likewise, the Aussie advances in a sideways movement. We can see that, after reaching its yearly high at 0.74135, the Aussie was dragged toward the extreme bearish sentiment zone, where the Australian currency bounced back to the extreme bullish sentiment.

Currently, the re-test of the recent intraday high at 0.7335 leads us to expect further upsides in the following sessions, likely to head to its early September highs at 0.7400.

Short-term Technical Outlook

The short-term Elliott Wave view exposed in the next 8-hour chart reveals the sideways advance in an incomplete flat pattern of Minuette degree identified in blue, which, according to the Elliott Wave theory, follows an internal sequence subdivided into 3-3-5. This corrective pattern in progress belongs to the fourth wave of Minute degree labeled in black.

The previous figure shows the current wave (b) in blue, which began on September 25th on 0.70059. The end of wave b of Subminuette degree identified in green pierced the origin of wave a. That leads us to consider the possibility that the current corrective formation could correspond to an expanded flat pattern. 

Finally, the current incomplete movement corresponding to wave c in green could advance to the potential target area between 0.7352 and 0.7465. If the price action doesn’t surpass the level 0.7352, then the price could test the sideways channel’s previous lows. 

The alternative scenario is if the price breaks above the 0.74134 level, climbing until 0.7465. Thar means the bullish pressure is strong. In that case, the next decline corresponding to wave c in blue will likely be weaker, ending in a region under 0.71, but no further than 0.70.

Categories
Crypto Videos

A Bitcoin Whale Shorted $100M BTC – Bitcoin Still Climbing!

https://youtu.be/J_7nj8GiCjc

https://youtu.be/J_7nj8GiCjc

A Bitcoin Whale Shorted $100M BTC: Why are Whales Selling at $16,000?

According to the pseudonyms trader CL, a Bitcoin whale has placed a short position worth $100 million on the Bybit exchange. This information came after various on-chain data pointed toward a whale-driven sell-off that occurred throughout the past week.
Even though the overall sentiment around Bitcoin remains strongly bullish, many reasons make $16,000 a very attractive area for sellers.

The $16,000 level provides significant liquidity, primarily due to it being a heavy resistance level. The level has seen quite a high buyer demand, as stablecoin inflows show. However, buyer demand is significantly lower at higher levels at the moment. Due to the clash of buyers and sellers at this level, this area of high liquidity makes it even more compelling for sellers.

Whales are taking profits

An unknown seller aggressively sold Bitcoin on Bybit on Nov 15. Order flows show that they sold approximately $100 million worth of Bitcoin in $3.5 million increments. These increments showed up in the order books on average consecutively over a couple of hours.

Based on the abrupt, though seemingly incremental, large-scale sell order, CL suggested that this could result in two possible scenarios.
The seller could get engulfed, thus causing a squeeze, which might cause the Bitcoin price to increase. The sell orders could continue to apply selling pressure on BTC even after the seller finishes selling his portion of Bitcoin.
“Someone aggressive sold almost $100 million on Bybit, a 3rd of the sell positions are open; personally, I’m pretty curious to see what happens if the seller does get engulfed, or if he will be let free,” – said CL.
Meanwhile, other major exchanges have spotted several large deposits during the time of the short-selling. United States-based crypto exchange Gemini saw a 9,000 Bitcoin deposit, according to the data coming from CryptoQuant.


Whales typically choose exchanges with strict compliance and strong regulatory measures, such as Coinbase and Gemini. Considering the large Bitcoin deposit to Gemini, which is worth around $143 million, a pseudonymous researcher better-known as “Blackbeard” said this is the time to be cautious.

Perhaps… Just Weekend Volatility?

As CL stated, Bitcoin’s current market structure is quite different from the previous cycle. As an example, when Bitcoin was at $16,000 in 2017, the market was more than just a bit overheated and experienced extreme volatility.

He said: “Back in 2017, when Bitcoin pumped from 10k, 15, into 20k, we had OKEx’s weekly futures trade in 1000$ contangos. Now we’re here with quarterly futures trading only 100$ above.”
This time around, the rally seems to be more sustainable and gradual. Bitcoin has continued to see, with a few minor setbacks, a staircase-like rally over the past six months. This kind of rally has allowed it to evolve into a prolonged uptrend. On top of that, rather than sudden spikes and no consolidation, Bitcoin has seen upside followed by consolidation, which is a much healthier way of gaining ground.

One thing to note is that, while it is true that institutions are getting into crypto at the moment, data such as Google Trends show that there is still little interest from retail investors, a complete opposite from late 2017.
There is a very strong argument to be made that the ongoing rally is fundamentally different from the one in 2017 despite the current market sentiment, which is reaching “extreme greed.” The available supply has decreased due to the 2020 halving, and the reserves on exchanges over the past year have reduced drastically.


The Bitcoin futures funding rates are also neutral, coming at around 0.01%, meaning that the market is not as overheated or overcrowded as it was in 2017. This trend could make the downside potential limited, especially in the medium term. Market maturity is certainly one thing that has changed since 2017, and whether Bitcoin goes up or down in the short-term, its upside potential, in the long run, is tremendous and very likely.

Categories
Forex Assets

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

Introduction

Introduction

Introduction

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

AUD/TRY Specification

Spread

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

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

Fees

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

Slippage

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

Trading Range in the AUD/TRY Pair

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

The Procedure to assess Pip Ranges

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

AUD/TRY Cost as a Percentage of the Trading Range

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

ECN Model Account costs

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

Total cost = 6

STP Model Account

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

Total cost = 10

The Ideal Timeframe to Trade  AUD/TRY Pair

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

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

Below is an example using the ECN account.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee

= 0 + 3 + 1 = 4

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

Categories
Forex Fundamental Analysis

Everything About ‘Germany Ifo Business Climate Index’ Forex Fundamental Indicator

Introduction

Introduction

Introduction

Although government expenditures play an important role in the economy, investments by the private sector can be said to be the backbone of any economy. Therefore, when the private sector businesses have a rosy outlook on the economy, it can be expected that they will increase their investments. For governments, economists, financial analysts, and forex traders, tracking investors’ expectations can help understand and even predict the future economy.

Understanding Germany Ifo Business Climate Index

The Ifo business climate index is used to rate the current business climate in Germany and also rates the expectations of businesses for the next six months. Thus, we can say that the Ifo Business Climate is a leading indicator of economic development in Germany.

Source: Ifo Institute

Since Germany is the largest economy in the Euro area, this index plays a vital role in influencing the E.U’s overall economic activity.

Calculating the Germany Ifo Business Climate Index

The Ifo Institute for Economic Research conducts a monthly survey of about 9000 businesses operating in Germany. The businesses operate in the construction, wholesaling and retailing, manufacturing, and service sectors – i.e., the survey covers the entirety of the German economy.

In the survey, the respondents are required to give their assessments of the current business environment and what they expect over the coming six months. In their responses, they can say that the current business environment is “good,” “satisfactorily,” or “poor.” For their expectations, they can respond as either “more favorable,” “unchanged,” or “more unfavorable.”

The Ifo then weighs these responses. The weight attached is based on the importance of the industry’s contribution to the overall economy. Their importance is gauged by the percentage of employees they have and their contribution to the GDP.

The balance in the current business situation is determined by the difference between the percentage of “good” and “poor” responses. Similarly, the balance business expectations are the difference between the percentage of the “more favorable” and “more unfavorable” responses. The business climate is calculated by taking the average of the balances of the current business situation and the expectations.

The Ifo index is seasonally adjusted to ensure that some of the recurring patterns are eliminated from the time series. To seasonally adjust the data, the Ifo Institute employs the X-13ARIMA-SEATS procedure developed by the U.S. Census Bureau.

Using the Germany Ifo Business Climate Index in Analysis

There are several ways in which this index can be used to show how the German economy is progressing.

When the index increases over time, it shows that the businesses are more inclined to increase their capital expenditure and investments in various projects in the economy. In doing so, they effectively ensure that the economic output will increase, which leads to higher GDP. Similarly, an increase in investments into economic projects and capital expenditures leads to an increase in production activities, which leads to higher employment levels.

Therefore, we can say that when the Ifo business climate index increases, it is expected that the rate of unemployment will reduce. Conversely, the rate of unemployment should be expected to rise when the Ifo business climate index drops. This is because the drop in the index implies that businesses expect business conditions will be more favorable. They will be prompted to cut back on investments and scale down core operations to mitigate losses. The resultant effect is lower levels of GDP and a higher unemployment rate.

Over the long term, the Ifo business climate index may be used to show the trends in business cycles and even used to predict recessions and economic recoveries. One of the primary drivers of any business is profiteering, which comes from their products’ demand. When businesses anticipate the demand to fall, their expectations are “more unfavorable.”

We know that the aggregate demand depends on the households’ demand. Therefore, when the demand is expected to fall, households are expected to have lesser disposable income, which could result from low wages and prevalent job losses; these are characteristics of a contraction. Therefore, when the Ifo business climate is continuously dropping, we can expect that the economy might go through bouts of recession.

On the other hand, if the Ifo business climate is steadily rising, it shows that the economy will undergo a steady period of expansion. This expansion comes from the fact that businesses will expect the demand for their goods and services to increase. This instance implies that households have more disposable income, which means wages have increased or employment increased.

Furthermore, when the economy has been through depression or recession, an improvement in the Ifo business climate index shows that the future is “more favorable.” It means that businesses do not expect the ongoing stage of recessions or depression to persist into the future. These expectations imply that businesses expect to increase their investments, a clear sign of economic recoveries.

 

Source: Ifo Institute

Impact of Germany Ifo Business Climate Index on the Euro

Germany is the largest economy in the E.U.; therefore, its economic outlook is bound to significantly impact the Euro since the EUR fluctuates depending on the economic performance of its member countries.

When the Germany Ifo Business Climate Index rises, it means that the German economy is expected to grow. Furthermore, the benefits of the resultant expansion of business operations in Germany might spill over to other countries in the E.U. in terms of job creation. As a result, the EUR will appreciate relative to other currencies.

Conversely, the EUR is expected to depreciate relative to other currencies when the Germany Ifo Business Climate Index continually drops. This drop signifies a potential contraction of the German economy, which may affect other EU-member countries.

Sources of Data

The Ifo Institute for Economic Research is responsible for conducting the surveys, aggregating data, and publishing the Germany Ifo Business Climate Index. Trading Economics has a historical time-series data of the Germany Ifo Business Climate Index.

How Germany Ifo Business Climate Index Release Affects The Forex Price Charts

The Ifo Institute for Economic Research published the latest business climate index on September 24, 2020, at 8.00 AM GMT. The release can be accessed at Investing.com. From the screengrab below, we can see that the German Ifo business climate index is a high-impact indicator.

In September 2020, the German Ifo business climate index was 93.4, lower than the analysts’ expectation of 93.8.

Let’s see how this lower than expected release impacted the EUR/GBP price action.

EUR/GBP: Before Germany Ifo Business Climate Index Release on 
September 24, 2020, just before 8.00 AM GMT

Before the release of the index, the EURGBP pair was trading in a weak uptrend. The 20-period M.A. was almost flattening. They adopted a weak downtrend moment before the release.

EUR/GBP: After Germany Ifo Business Climate Index Release on 
September 24, 2020, at 8.00 AM GMT

After the release of the Germany Ifo Business Climate Index, the pair formed a 15-minute bullish candle but adopted a strong downtrend afterward. The 20-period M.A. steeply fell with candles forming further below it. This trend shows that the EUR weakened against the GBP since the Germany Ifo Business Climate Index was weaker than expected.

As shown by the above analyses, the Germany Ifo Business Climate Index has a significant impact on forex price actions.

Categories
Forex Course Forex Daily Topic

176. Introduction To The Commitment of Traders Report (CoT)

Introduction

Introduction

Introduction

In the previous lesson, we discussed market sentiment in Forex. Since you already know how the sentiment comes along, in this lesson, we will discuss how the forex market sentiment is measured.

What is the Commitment of Traders Report?

The commitment of traders (COT) report is how you measure forex market sentiment. One of the primary determinants of market sentiment in forex is the demand for a currency. The COT report tracks how commercial and non-commercial traders are positioned in the forex market.

As the name suggests, the COT report gives data about commitments made by big players in the forex market to conduct future trades. The report shows the totality of futures and options contacts in the forex market, which have not yet been settled. Thus, these future transactions can impact the price movement of the currency pairs in the spot market where most retail traders participate.

How does the Commitment of Traders Report work?

The COT report is published by the US Commodity Futures Trading Commission (CFTC). The publication is released every Friday at 3.30 PM ET. This report shows the total outstanding open positions in the forex futures market as of Tuesday of that week. The data in the COT report includes futures of the major currencies and most of the minor currencies.

According to the CFTC, the COT report is a breakdown of the futures and options market positioning of at least 20 traders. These are traders whose futures and options positions in the forex market are above or equal to the reporting levels set by the CFTC. In our subsequent lessons, we will further explain the type of traders included in the COT reports and the reporting levels.

It is worth noting that the majority of the transactions in the interbank forex market are private and are not made public. For this reason, the retail traders do not have a lot of knowledge about the significant transactions that occur daily in the forex market. Therefore, the COT reports play a significant role in publicizing the futures positioning in the forex market.

Conclusion

The forex market portion of the COT report shows the totality of the long and short futures position adopted by traders. These are speculative traders; whose primary objective is to anticipate future price changes and place their bets regarding a currency. Therefore, monitoring how these market players have positioned their future trades might increase your analysis of future trends in the forex market.

[wp_quiz id=”89646″]
Categories
Crypto Market Analysis

Daily Crypto Review, Nov 18 – Bitcoin Encounters Heavy Resistance at $18,500: What Happens Next?

The cryptocurrency sector has spent the day mostly stable and looking at Bitcoin as it kept pushing towards highs unseen after the bull run of late 2017. The largest cryptocurrency by market cap is currently trading for $17.829, representing an increase of 6.64% on the day. Meanwhile, Ethereum gained 2.00% on the day, while XRP lost 1.90%.

The cryptocurrency sector has spent the day mostly stable and looking at Bitcoin as it kept pushing towards highs unseen after the bull run of late 2017. The largest cryptocurrency by market cap is currently trading for $17.829, representing an increase of 6.64% on the day. Meanwhile, Ethereum gained 2.00% on the day, while XRP lost 1.90%.

The cryptocurrency sector has spent the day mostly stable and looking at Bitcoin as it kept pushing towards highs unseen after the bull run of late 2017. The largest cryptocurrency by market cap is currently trading for $17.829, representing an increase of 6.64% on the day. Meanwhile, Ethereum gained 2.00% on the day, while XRP lost 1.90%.

 Daily Crypto Sector Heat Map

Nexo gained 14.37% in the past 24 hours, making it the most prominent daily gainer out of the top100 cryptos ranked by market capitalization yet again today. It is closely followed by Bitcoin Gold’s gain of 10.84% and DigiByte’s 9.52% gain. On the other hand, SushiSwap lost 12.92%, making it the most prominent daily loser. Curve DAO Token lost 10.74% while HedgeTrade lost 10.07%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has skyrocketed over the course of the day, with its value is currently staying at 66.3%. This value represents a 1.4% difference to the upside compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone up quite a bit over the course of the day. Its current value is $498.06 billion, representing a $20.84 billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

Bitcoin has had a parabolic run to the upside, reaching as high as $18,500 before dropping down. While the price gain was gradual at first, Bitcoin’s final push from $17,600 to $18,500 and then back to nearly $17,000 happened in just a couple of hours. This volatility came to be because BTC encountered heavy resistance at the now-confirmed $18,500 resistance level. Many traders call this move just a temporary pullback before a new high, while a minority is calling a short-term top.

Trading Bitcoin on a bull trend such as this one should only happen in one direction, and that is WITH the trend. Shorting Bitcoin and attempting to catch pullbacks will be far less lucrative due to the size of the move, as well as much riskier.

BTC/USD 1-hour Chart

Bitcoin’s technicals on the 4-hour, daily, and weekly time-frame are all completely bullish and show no signs of bear or neutral presence. On the other hand, its monthly overview is tilted towards the buy-side just slightly and does show some bearishness.

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 is between its middle and top Bollinger band
  • RSI is stabilizing after leaving the overbought territory (61.38)
  • Volume is descending
Key levels to the upside          Key levels to the downside

1: $18500                                  1: $17,850

2: $19000                                  2: $17,450

3: $19500                                   3: $17,130

Ethereum

Ethereum had had a turbulent 24 hour period, as its price went from fighting for and hovering over the top line of the ascending channel all the way to $495 and then back to $455 before it stabilized at around $475. This move has clearly shown the market another ascending line (red) formed on the ETH/USD chart, which has been tested a couple of times already. This line is Ethereum’s final resistance towards $500.

Ethereum should, as most cryptos at the moment, be traded only to the upside, as trading its pullbacks during a bull market is simply not worth it.

ETH/USD 2-hour Chart

Ethereum’s weekly time-frame shows some neutrality alongside its overall bullish stance, while the other time-frames show complete bullishness.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is above both its 50-period and its 21-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is neutral (55.77)
  • Volume is above average
Key levels to the upside          Key levels to the downside

1: $490                                     1: $470

2: $500                                     2: $451 

3: $510                                      3: $445

Ripple

The fourth-largest cryptocurrency by market cap started off the day by pushing towards the upside and almost reaching its $0.31 resistance level. However, the bears have stepped in and brought XRP’s price down to $0.28 before consolidating in the middle of the range between the two aforementioned levels.

If Bitcoin doesn’t make another sharp move in the short-term, XRP is (yet again) sideways-action crypto. However, if BTC moves, it’s safest to watch Bitcoin and trade along with the bullish moves while discarding the bearish entries.

XRP/USD 4-hour Chart

XRP’s 4-hour, daily, and weekly technicals are tilted towards the buy-side, and while they aren’t showing signs of neutrality, the bullish sentiment isn’t as strong either. The monthly overview does, on the other hand, show clear signs of neutrality.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price is above its 50-period EMA and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (54.33)
  • Volume is above average
Key levels to the upside          Key levels to the downside

1: $0.31                                     1: $0.28 

2: $0.3244                                 2: $0.27

3: $0.3328                                3: $0.266

 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 18 – Top Trade Setups In Forex – Series of Inflation Reports Ahead! 

On the news front, eyes will remain on the low and medium series impacts economic evens from U.K., Eurozone, and Canada. Its the CPI figures which are coming from all three major economies during European and the U.S. sessions. The U.K. and Eurozone Inflation reports are expected to remain neutral, with no major change expected, and these may have a muted impact on the market. However, the Canadian CPI is expected to perform slightly better, surging by 0.2% vs. -0.1% dip during the previous month. It may support Lonnie pairs today.

On the news front, eyes will remain on the low and medium series impacts economic evens from U.K., Eurozone, and Canada. Its the CPI figures which are coming from all three major economies during European and the U.S. sessions. The U.K. and Eurozone Inflation reports are expected to remain neutral, with no major change expected, and these may have a muted impact on the market. However, the Canadian CPI is expected to perform slightly better, surging by 0.2% vs. -0.1% dip during the previous month. It may support Lonnie pairs today.

On the news front, eyes will remain on the low and medium series impacts economic evens from U.K., Eurozone, and Canada. Its the CPI figures which are coming from all three major economies during European and the U.S. sessions. The U.K. and Eurozone Inflation reports are expected to remain neutral, with no major change expected, and these may have a muted impact on the market. However, the Canadian CPI is expected to perform slightly better, surging by 0.2% vs. -0.1% dip during the previous month. It may support Lonnie pairs today.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18605 after placing a high of 1.18935 and a low of 1.18423. The EUR/USD pair continued to move in bullish track for the 4th consecutive day on Tuesday amid the downbeat economic data from the U.S. and broad-based U.S. dollar weakness. The improved risk sentiment in the market continued supporting the EUR/USD pair on Tuesday in the early trading session, which pushed the currency pair towards a fresh weekly high at 1.1894. The risk sentiment was supported by the latest optimism from the vaccine candidates of Pfizer and Moderna. After the latest announcement from Moderna that its vaccine was 94.5% effective in last stage trials, the risk sentiment picked its pace and favored the riskier assets like EUR/USD pair.

However, the currency pair could not remain on the top for long and started losing some of its daily gains on Tuesday amid the risk-off market environment in the second half of the day. The U.S. dollar gained traction in the second half and weighed on the currency pair EUR/USD after the chances for a further stimulus package from Congress declined.

The U.S. Dollar Index was down to an 8-day lowest level of 92.26 in the first half of the day because of the rising number of coronavirus cases and lockdown restrictions in the economy. The increased number of coronavirus cases from the U.S. forced governments to impose restrictive measures to control the spread of the virus, and the chances for quick economic recovery faded that ultimately weighed on the U.S. dollar and helped EUR/USD pair to reach a new weekly high level.

However, the U.S. dollar lost its momentum after the release of its macroeconomic data on Tuesday. At 18:30 GMT, the Core Retail Sales for October dropped to 0.2% from the estimated 0.6% and weighed on the U.S. dollar. In October from the U.S., the Retail Sales also dropped to 0.3% from the expected 0.5% and weighed on the U.S. dollar. The Import Prices in the U.S. for October were declined to -0.1% from the estimated 0.2%and weighed on the U.S. dollar that helped EUR/USD pair to post gains.

At 19:00 GMT, the Capacity Utilization Rate from the U.S. raised to 72.8% against the forecasted 72.3% and supported the U.S. dollar that capped further gains in EUR/USD pair. The Industrial Production remained flat with the anticipations of 1.1% in October. At 20:00 GMT, the Business Inventories for September surged to 0.7% against the projected 0.5% and weighed on the U.S. dollar. The NAHB Housing Market Index from the U.S. surged to 90 from the estimated 85 and supported the U.S. dollar that eventually weighed on the EUR/USD pair and capped further gains.

From the European side, at 14:02 GMT, the Italian Trade Balance raised to 5.85B against the forecasted 4.30B. It supported the single currency Euro that ultimately added gains in the EUR/USD pair.

Furthermore, the European Central Bank President, Christine Lagarde, sounded pessimistic on Tuesday concerning the economic outlook and said that there was very negative news on the second wave of coronavirus in the economy before vaccine news. She expected a massive effect of the second wave of COVID-19 on the European economy into 2021. These comments from Lagarde also kept the pair EUR/USD under pressure on Tuesday.

Daily Technical Levels

Support   Resistance

1.1837      1.1890

1.1814      1.1918

1.1785      1.1942

Pivot Point: 1.1866

EUR/USD– Trading Tip

The EUR/USD is trading with a bullish bias, holding mostly above the upward trendline support level of 1.1850. Closing of candles above the 1.1869 level is likely to drive bullish movement in the EUR/USD pair until the 1.1885 level. The bullish bias remains dominants today as the MACD and 50 periods EMA support a bullish trend. We are already holding a buying trade from yesterday; therefore, you are advised to follow our forex signals page for more updates on the EUR/USD pair. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.32483 after a high of 1.32724 and a low of 1.31863. The GBP/USD pair raised and continued its bullish track for 3rd consecutive day on Tuesday amid the latest Brexit hopes.

Due to the increased number of COVID-19 cases from across the globe, and the restrictive measures by countries to curb the virus’s spread, the demand for safe-haven currencies increased. In contrast, the riskier currencies like the British Pound remained under pressure.

The Sterling remained supportive in this risk-off mode due to the latest comments from the U.K. chief negotiator, David Frost, that boosted the Brexit deal’s confidence. According to a news report by the U.K. newspaper, The Sun, the previous concerns about the differences in key issues vanished after Britain’s chief negotiator David Frost commented to Boris Johnson that he expects a trade deal signed early next week.

After these comments from David Frost, the GBP/USD pair rallied and started moving upward for the 3rd consecutive day.

Meanwhile, the risk sentiment buoyed by the latest optimism regarding the vaccine development from Moderna also supported the British Pound’s bullish momentum and added further to the gains of the GBP/USD pair on Tuesday. Furthermore, the U.S. dollar weakness also played an important role in pushing the currency pair GBP/USD higher on Tuesday with poor macroeconomic figures. At 18:30 GMT, the Core Retail Sales for October declined to 0.2% from the expected 0.6% and weighed on the U.S. dollar. In October from the U.S., the Retail Sales also fell to 0.3% from the anticipated 0.5% and weighed on the U.S. dollar. The Import Prices in the U.S. for October fell to -0.1% against the projected 0.2%and weighed on the U.S. dollar that added further gains in the GBP/USD pair on Tuesday.

At 19:00 GMT, the Capacity Utilization Rate from the U.S. surged to 72.8% against the anticipated 72.3% and supported the U.S. dollar that capped further gains in GBP/USD pair. The Industrial Production came in line with the projections of 1.1% in October. At 20:00 GMT, the Business Inventories for September increased to 0.7% against the estimated 0.5% and weighed on the U.S. dollar, which added strength to the GBP/USD pair. The NAHB Housing Market Index from the U.S. rose to 90 from the projected 85 and supported the U.S. dollar.

Meanwhile, the governor of Bank of England, Andrew Bailey, said that the development of seemingly effective coronavirus vaccines was a bigger step forward for the economy that could lower uncertainty and get firms to reinvest. He also said that the business investment had been unusually weak since the financial crisis and weighting on productivity. Bailey also said that the changes due to coronavirus would more likely be within the services sector as it can be seen with a focus on digital services over the face to face work taking hold. Moreover, the Bank of England Deputy Governor Dave Ramsden said that positive news about the coronavirus vaccine could help reduce the risks facing Britain’s economy. Still, the central bank was unlikely to revise up its forecasts as a result.

Daily Technical Levels

Support   Resistance

1.3155      1.3236

1.3118      1.3280

1.3073      1.3317

Pivot point: 1.3199

GBP/USD– Trading Tip

The GBP/USD pair is trading bullish at the 1.3279 level, holding over the 1.3227 support level, which is extended by an upward trendline on a 2-hour timeframe. The Cable is likely to face immediate resistance at the 1.3297 area, which will be confirmed if the candle starts closing below this level. However, the bullish breakout of the 1.3297 level can drive further upside movement until the 1.3370 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.184 after placing a high of 104.598 and a low of 104.069. The pair USD/JPY continued its bearish trend for the 4th consecutive day on Tuesday amid broad-based U.S. dollar weakness and Japanese yen strength due to safe-haven appeal.

On Tuesday, the USD/JPY pair fell below 104.1 level after the safe-haven demand rose due to the increasing number of coronavirus cases and the restrictions from all over the world. Many countries started imposing restrictive measures to control the spread of coronavirus that raised concerns over the global economy’s recovery that lifted the safe-haven appeal. The rising safe-haven demand supported the safe-haven Japanese Yen and weighed on the USD/JPY pair on Tuesday.

The safe-haven demand deteriorated a little after the latest optimism regarding the vaccine development from Moderna that gave an efficacy rate of 94.5%. However, there was still a long way to go before the vaccine can be delivered to everyone. According to Federal Reserve Vice Chairman Richard Clarida, the chances for the U.S. economic recovery have been improved due to candidates’ successful test from both Moderna and Pfizer Inc.

On the U.S. front, the U.S. dollar was weak due to the poor macroeconomic data on Tuesday. At 18:30 GMT, the Core Retail Sales for October fell to 0.2% from the anticipated 0.6% and weighed on the U.S. dollar that added pressure on the USD/JPY pair. In October from the U.S., the Retail Sales also declined to 0.3% from the forecasted 0.5% and weighed on the U.S. dollar that weighed on USD/JPY pair. The Import Prices in the U.S. for October were declined to -0.1% from the estimated 0.2%and weighed on the U.S. dollar added pressure on the USD/JPY pair.

At 19:00 GMT, the Capacity Utilization Rate from the U.S. surged to 72.8% against the estimated 72.3% and supported the U.S. dollar that capped further losses in the USD/JPY pair. The Industrial Production came in line with the anticipations of 1.1% in October. At 20:00 GMT, the Business Inventories for September rose to 0.7% against the projected 0.5% and weighed on the U.S. dollar that added pressure on the USD/JPY pair. The NAHB Housing Market Index from the U.S. surged to 90 from the expected 85 and supported the U.S. dollar that eventually capped further losses in the USD/JPY pair.

Moreover, the Federal Reserve Chairman, Jerome Powell, said on Tuesday that as the coronavirus cases were increasing to an alarming rate, it was the time when there was a bigger need for further coronavirus relief from Congress. Powell also noted that the recent announcements from Pfizer and Moderna were certainly good news in the medium term; however, major challenges and uncertainties remain in the near term.

Powell also said that Congress should deliver direct financial support targeted to specific groups instead of using the Federal Reserve’s lending tools. Powell’s comments also weighed on the USD/JPY pair as the need for further support from the Fed and Congress weighed on the U.S. dollar.

Daily Technical Levels

Support   Resistance

103.95      104.51

103.73      104.85

103.39      105.08

Pivot point: 104.29

USD/JPY – Trading Tips

The USD/JPY extends its bearish trend below the 104.430 level, falling from the 104.850 support area. On the lower side, the USD/JPY pair is likely to find support at the 103.800 level, and violation of this level can also extend further selling bias until 103.227. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.400 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck! 

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Forex Videos

Forex – How To Trade The USDJPY Pair!

https://youtu.be/HMXERprThrg

https://youtu.be/HMXERprThrg

How to trade the USDJPY pair

 

Thank you for joining this forex academy educational video.

How to trade the US dollar Japanese yen pair?
The US dollar Japanese yen is one of the so-called major pairs, and accounted for 13.2% of all the daily forex transactions settled during 2019. And the yen is the most frequently traded currency in Asia.
The United States is seen as the largest economy on the planet, albeit battered and bruised by the Covid pandemic, and Japan also has a strong economy, largely export-driven, and many things in common with the United States, including large stock markets. The relationship between the two countries is ever improving and has evolved significantly since the post-world war II era.

The pair can be extremely volatile at times and prone to large swings, but the basic rule of thumb is that when the United States was pre covid and its economy was strong, traders preferred dollars over yen. And since the United States has been in the grip of the pandemic, and even though the economy still massively outweighs that of Japan, traders prefer to buy the Japanese yen in times of uncertainty. It is seen as a safe-haven currency.

Let’s take a look at some price action on this monthly chart, where we see an A, B, C, D price swing since August 2006 of almost 13,000 pips. This is not a pair to be traded without caution and tight stop losses by retail traders.

This weekly chart highlights two periods A and B between 2018 and 2020, where the difference between the top and bottom of both ranges is approximately 1000 pips. Again, these are account busting moves if you are on the wrong side of the trade and without a cautious stop loss in place.

And yet, the overall trend as seen clearly here, again, on the weekly chart, which shows a snapshot of the pair since April 2017, is a downtrend. The yen is stronger overall.

Here we are still looking at the weekly chart. However, we have highlighted a couple of stages in the price action for this pair. Firstly, we must note the high at position A, with an exchange rate of 112.17, and the low at 101.17, which came just a couple of weeks later, where the yen was being bought as a safe-haven asset against the US dollar as the pandemic began to take hold. This was a significant swing in the exchange rate.
Now take a look at the bear channel shown at position C. Institutions look at the higher time frames and, as they hold all the aces in terms of their ability to move the markets with the size of their forex transaction, this is where retail traders need to focus their attention with regard to likely price action moves for the longer term.


Of course, retail traders should never trade on weekly or monthly timeframes because they would need to incorporate huge stop losses. We have already demonstrated with this pair moves of over 1000 pics is simply nothing here.

But they can and should use the information to try and establish the overall trend that institutional traders are looking at.
And here, we have brought the timeframe down to an hourly one, and we can see that since the 10th of November 2020, we have two peaks forming a line of resistance. Two areas forming a line of support and the grey circle, which clearly shows a breach of that support line, and with all of the uncertainty going on with regard to a new United States president, the worsening situation with regard to the pandemic in America with 150,000 new cases reported just a few days ago; we can only surmise that with all of this information that traders may continue to push the pair and to the previous low of 101.00 which we saw earlier on the monthly chart while favoring the safe-haven stats of the yen over the US dollar.

In conclusion, traders should be looking for potential signs of a weakening or pullbacks to get on board to short this pair. As we have clearly seen, the pair is subject to huge price swings, and tight stops should be incorporated.

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Forex Daily Topic Forex Videos

Secret Techniques For Profitable Forex Trading Part 1!

https://youtu.be/ub-NttxWFSw

https://youtu.be/ub-NttxWFSw

Secret Techniques for Profitable Forex Trading I

 

Profitable Forex trading is an elusive goal for many traders. According to most statistics, over 75 percent of traders lose money. This comes for several reasons. There are well-known causes of this unfortunate outcome. Most traders get blown out because they bet too much and lose all when the market turns against them. Another source of failure is their psychological bias to let losses grow and cut their profits short. But today, we will focus on one key factor: How to assess entries and exits properly.

The States of a Market

Many people classify market action into over six states: Bul, Bear, Sideways with high or low volatility. Although this is usually correct, it does not offer enough simplicity to make decisions. The best way to look at market action is similar to what the Elliott Wave Theory states: Elliott stated that the market had impulsive phases and corrections of this primary impulse. We don’t need to be a genius to see that it is logical. Waves need to swing for it to form. But impulses and corrections have different properties. What works on one, it does not work on the other. Thus, the secret to master the trade is to
Assess which state the market is on
Apply the proper tools for entries and exits.

Impulse Properties

Impulses are characterized by directional movement. Bull or bear, we can see a steady price movement toward a new equilibrium, as impulses are created by an imbalance between supply and demand. The volatility on impulses is directional, and the tools to apply are moving averages and superior form of them such as instant trend, MAMA, MESA, and similars.

Chart 1 – Bitcoin 4H chart impulsive Phase

In chart 1, we show Bitcoin moving in its latest impulsive phase, although we can also see a glimpse of corrective structures. The main idea here is to follow the trend. The chart shows a ribbon formed by Ehlers Instant trend, an advanced indicator freely available on Tradingview but also MT4 and MT5 platforms.
We see that the indicator is right at delivering timely entries and exits. The chart also shows its 50 and 200 simple moving averages, heading up and supporting the trend. We can see that the touching of the 50-SMA line could be used as well to enter or add to the position, although the instant trendline seems to lead the 50-SMA. Tradingview’s Instant Trendline Indicator colorizes the candles’ body so the upward phases can be spotted with ease.

Corrective Properties

Corrective phases come at the end of an impulse. We have to realize that impulses come from a lack of equilibrium between buyers and sellers due to actions to find a new fair value. The fair price is unknown; thus, usually, the impulse creates overbought or oversold conditions. When some savvy traders spot this, they start to unload their positions in a profit-taking activity. That lowers the price to a level where it finds new buyers. The price moves up now, but the memory of traders who lost near the top makes more selling pressure ahead of this level, lowering the price and creating a cyclic path. Thus, the main characteristic of corrective phases is its cyclic characteristic, whereas the main feature of impulses is their lack or decline of cycles.

Since the cycle is the main component of corrections, The best way to time them is by using an oscillator, such as the Stochastic, RSI, or an advanced wave oscillator. If you’re price-action oriented, you may use support-resistance levels and breakouts to spot the right entries and exits.


Chart 2 – Bitcoin 1H chart Corrective Phase with Ehlers Stochastic CCI, Stochastic, and AutoCorr Angles.

As an example, we show on chart 2 the corrective phase of Bitcoin that started after a move up to $15,000 from the last consolidation of $13,500.
The image shows the stochastic oscillator( third curve) and two advanced oscillators buy the innovator of this century, John Ehlers, The Stochastic CCI, and Autocorrelation Angle. These two can also be found on Tradingview.com and MT4 and MT5 platforms.
We see that the Ehler’s Stochastic CCI (second curve, following the price) can precisely time the cycles on the chart with razor-sharp precision. However, the Stochastic oscillator is not far behind and can be used to profit from these cycles or confirm a reversal candle.

The bottom image shows the Autocorrelation angles indicator.
Autocorrelation is an advanced way to spot the short-term memory of the markets. A sharp move on the angle will show a transition from bear to bullish and bullish to bearish phases. This indicator is harder to handle, though.

There are many others, such as the Even better Sinewave indicator, shown in the third chart. The Even Better Sinewave is designed to find the dominant cycle of the price action. Sometimes, the market loses its pace, as happens in the whipsaw (amber) shown. But most of the time, this advanced indicator can time the cycle changes accurately.


Chart 3 – Bitcoin 1H chart Corrective Phase with Even Better Sinewave Indicator

To conclude
Markets have two phases: Impulsive and corrective.
Each needs the right tools to find suitable entries and exits.
Traders need to spot first the state of the market.
If Impulsive, apply Averages or advanced versions of moving averages and follow the trend.
If corrective, use oscillators to spot turning points.
Don’t be conformist. Look for advanced tools and learn to use them. They will give you a better edge.

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 17 – Bitcoin Crushes $16,500; XRP Explodes to the Upside

The cryptocurrency sector has spent the day trying to reach past its recent highs as Bitcoin pushed past $16,500. The largest cryptocurrency by market cap is currently trading for $16,718, representing an increase of 2.97% on the day. Meanwhile, Ethereum gained 2.34% on the day, while XRP gained an astonishing 10.46%.

The cryptocurrency sector has spent the day trying to reach past its recent highs as Bitcoin pushed past $16,500. The largest cryptocurrency by market cap is currently trading for $16,718, representing an increase of 2.97% on the day. Meanwhile, Ethereum gained 2.34% on the day, while XRP gained an astonishing 10.46%.

The cryptocurrency sector has spent the day trying to reach past its recent highs as Bitcoin pushed past $16,500. The largest cryptocurrency by market cap is currently trading for $16,718, representing an increase of 2.97% on the day. Meanwhile, Ethereum gained 2.34% on the day, while XRP gained an astonishing 10.46%.

 Daily Crypto Sector Heat Map

Curve DAO Token gained 14.27% in the past 24 hours, making it the most prominent daily gainer out of the top100 cryptos ranked by market capitalization yet again today. It is closely followed by yearn.finance’s gain of 12.92% and Litecoin’s 10.99% gain. On the other hand, THORChain lost 7.28%, making it the most prominent daily loser. The Midas Touch Gold lost 6.16% while Uniswap lost 4.22%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has decreased slightly over the course of the day, with its value is currently staying at 64.9%. This value represents a 0.1% difference to the downside compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone up very slightly over the course of the day. Its current value is $477.28 billion, representing a $13.89 billion 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

After confirming its stance above $16,000 after fighting for it over the weekend, the largest cryptocurrency by market capitalization pushed towards $16,500 and attempted to reach new highs. The push was strong as there was no real sell pressure, so Bitcoin reached past $16,500 (and eventually past $16,700) without any real increase in volume. While the $16,500 position has been successfully tested once, the $16,700 level is still not completely won.

Trading Bitcoin on a bull trend such as this one should only happen in one direction: WITH the trend. Shorting Bitcoin and trying to catch pullbacks will be less lucrative due to the size of the move, as well as riskier due to the market sentiment.

BTC/USD 4-hour Chart

Bitcoin’s technicals are tilted towards the buy-side on all four time-frames (4-hour, daily, weekly, and monthly). However, all of them have some form of neutrality, implying that the bullish sentiment is not absolute.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is far above its 50-period EMA and its 21-period EMA
  • Price is near its top Bollinger band
  • RSI is approaching the overbought territory (65.02)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $17,000                                 1: $16,700

2: $18000                                  2: $16,500

3: $18500                                   3: $16,000

Ethereum

Ethereum has spent the past two days slowly moving towards the top line of the ascending channel after pulling back to $440. The move was gradual but saw some resistance when it reached the top line. However, Ethereum bulls endured and ultimately broke the level but got instantly stuck at the $470 resistance, which is another wall they have to jump over to remain above this channel.

If Ethereum’s struggles to break the $470 level continue, we may expect a pullback of some sort. With that being said, due to the overall sentiment towards Ethereum (and its 2.0 implementation) as well as the state of the crypto sector, shorting Ethereum should not be a proper trading strategy, even if ETH does pull back.

ETH/USD 4-hour Chart

Ethereum’s 1-day technicals are slightly bullish but are showing signs of neutrality. On the other hand, its 4-hour, weekly, and monthly overviews are completely tilted towards the buy-side.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is above both its 50-period and its 21-period EMA
  • Price is slightly above its middle Bollinger band
  • RSI is neutral (57.54)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $470                                     1: $451

2: $490                                     2: $445 

3: $500                                      3: $420

Ripple

The fourth-largest cryptocurrency by market cap had yet another incredible day, with its price pushing past the $0.27 and even $0.2855 resistance levels. An incredible bull wave brought XRP’s price to $0.3 before it started to pull back slightly. This move has pushed XRP further up towards being the best-performing asset over a 1-week period compared to BTC and ETH, with gains of 18% this week, compared to BTC’s gains of 2.95 and ETH’s gains of 0.76.

Traders can finally look at XRP as a cryptocurrency that isn’t just used for sideways trading, and look for opportunities near new highs.

XRP/USD 4-hour Chart

XRP’s 4-hour, daily, and monthly technicals are slightly tilted towards the buy-side, and all of them are showing more or less signs of neutrality. The weekly overview is, on the other hand, completely bullish.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price is above its 50-period EMA and its 21-period EMA
  • Price is at its top Bollinger band
  • RSI is heavily overbought (76.99)
  • Volume is above average
Key levels to the upside          Key levels to the downside

1: $0.31                                     1: $0.2855 

2: $0.3244                                 2: $0.27

3: $0.3328                                3: $0.266

 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 17 – Top Trade Setups In Forex – Retail Sales in Focus! 

TheThe eyes will remain on the retail sales, Capacity Utilization Rate, and Industrial Production from the United States on the news side on the news side. Retail sales are expected to drop, and they may place bearish pressure on the U.S. dollar. At the same time, the Capacity Utilization Rate and Industrial Production are expected to perform better.

TheThe eyes will remain on the retail sales, Capacity Utilization Rate, and Industrial Production from the United States on the news side on the news side. Retail sales are expected to drop, and they may place bearish pressure on the U.S. dollar. At the same time, the Capacity Utilization Rate and Industrial Production are expected to perform better.

TheThe eyes will remain on the retail sales, Capacity Utilization Rate, and Industrial Production from the United States on the news side on the news side. Retail sales are expected to drop, and they may place bearish pressure on the U.S. dollar. At the same time, the Capacity Utilization Rate and Industrial Production are expected to perform better.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18537 after placing a high of 1.18686 and a low of 1.18139. EUR/USD pair remained on positive foot for the 3rd consecutive day and posted gains on Monday. In the early trading session, risk sentiment started to dominate financial markets after Moderna announced that its COVID vaccine candidate showed 94.5% effectiveness in the latest trials. However, the single currency Euro found it hard to take advantage of the improved market mood since the European Central Bank made it clear that they will act in the upcoming December meeting.

While speaking at an event on Monday, the European Central Bank and policymaker Pablo Hernandez de Cos said that foreign exchange moves between the USD and the EUR had reached a concerning phase. De Cos further said that the monetary aid should be increased to avoid market destruction, given the worsening outlook for economic activity and inflation.

These comments from ECB policymaker, along with the hopes for further easing from ECB next month, exerted high pressure on the single currency that capped further gains in EUR/USD pair on Monday. However, the currency pair remained positive for the day, even though the European economy was hit hard by the coronavirus pandemic.

According to Johns Hopkins University, more than 54 million people had been infected by COVID-19 globally. In Europe, governments scrambled amid an alarming rise in numbers as France’s health authorities reported 9406 new cases on Monday. Germany postponed its decision on further lockdown measures until next week.

The German Chancellor Angela Merkel said that she wanted to impose further restrictions immediately, but she did not have a majority, so the decision was postponed until November 25. The tightening of lockdown measures was something nobody wanted, and that helped the single currency Euro and supported it. Meanwhile, Sweden placed a nationwide limit of eight people for all gatherings to slow down coronavirus spread. The limit will take effect from November 24 and will last for four weeks.

Despite all these tensions regarding the coronavirus pandemic, the single currency Euro struggled to hold near its best levels against its rival, the U.S. dollar, on Monday. The higher market sentiment also supported Euro amid the coronavirus vaccine news.

On the data front, the Empire State Manufacturing Index for November declined to 6.3 against the forecasted 13.8 and weighed on the U.S. dollar that added gains in EUR/USD pair on Monday. Other than macroeconomic data, the U.S. dollar was already weak in the market due to the rising number of coronavirus cases in the U.S. The weak U.S. dollar added further to the upward movement of the EUR/USD pair.

Daily   Technical Levels

Support Resistance

1.1821      1.1877

1.1789      1.1901

1.1765      1.1932

Pivot point: 1.1845

EUR/USD– Trading Tip

The EUR/USD is trading sideways, holding mostly below the double top resistance level of 1.1860 level. Still, recently it has formed a Doji pattern followed by bullish candles, suggesting that the buyers are exhausted, and sellers may enter into the market soon. Therefore, we can expect the EUR/USD price to trade bearish until the 1.1838 level, the support level extended by an upward trendline on the hourly timeframe. Bullish crossover of 1.1865 level can also trigger buying until 1.1910.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.31999 after placing a high of 1.32422 and a low of 1.31654. The British Pound was high on Monday as the Brexit talks were resumed between the E.U. and the U.K.

There were increasing signs that little progress could be made in this week’s trade talks. The Brexit optimism with the resumed trade talks drove the British Pound higher on Monday that ultimately pushed the GBP/USD pair on the upside.

However, the pair failed to remain there for long as some investors started giving warning that a deal between the E.U. and the U.K. was unlikely this week in the wake of turmoil in the U.K. government. The two of Prime Minister Boris Johnson’s pro-Brexit advisors, Cummings and Cain, were ousted last week. Moreover, the prospects of failure to reach a deal were fading away with the hopes that if an agreement would not be reached, the deadline could stretch into the final weeks before the end of the transition period on December 31.

The negotiations are potentially stretching into December as the deadline of November 19 was close, and the differences in both sides were larger. Ireland’s foreign minister initially warned that a deal f this size is difficult to reach within a week or ten days, although the talks could continue for a further two weeks. The Brexit deal has left to solve 3 key sticking points, including the level playing field, governance, and fisheries. The control over fisheries has been highlighted as one of the main hindrances, as French President Emmanuel Macron has been reluctant to give Britain’s demand for full sovereignty over access to its waters amid concerns French fishers could lose out.

However, the GBP/USD pair posted gains as the UK PM Boris Johnson’s office said in a statement that they were confident that the U.K. would prosper if they fail to reach a trade deal with the E.U. Apart from Brexit, the GBP/USD pair’s gains were lost a bit after the UK PM Johnson self-isolated himself after having close contact with a coronavirus case despite without symptoms and being well. Johnson has already contracted coronavirus case back in April.

The number of coronavirus cases in the U.K. stayed above 20,000 per day despite the ongoing restrictive measures. Meanwhile, a medical adviser in the U.K. said that the government would have to consider strengthening the three-tier system of restrictions used to control coronavirus spread when the full lockdown in England ends. These tensions kept the GBP/USD pair under pressure on Monday and kept the gains limited.

Meanwhile, a U.S. drugmaker Moderna also announced that its vaccine was proven 94.5% effective in preventing the coronavirus that raised risk sentiment in the market and supported the risk perceived British Pound and added in the gains of GBP/USD pair on Monday. Furthermore, Britain reported that it had secured about five million doses of an experimental coronavirus vaccine developed by Moderna after reporting positive trial results. The health minister Matt Hancock from the U.K. said that the earliest doses are expected for delivery in Spring.

On the data front, the Rightmove HPI from Great Britain was released on Monday at 05:01 GMT, which came in as -0.5% in November against October’s 1.1%. From the U.S. side, the Empire State Manufacturing Index was declined to 6.3 against the forecasted 13.8 and weighed on the U.S. dollar and added strength to GBP/USD pair on Monday.

Daily   Technical Levels

Support Resistance

1.3155      1.3236

1.3118      1.3280

1.3073      1.3317

Pivot point: 1.3199

GBP/USD– Trading Tip

The GBP/USD pair is trading at 1.3208 level, holding over 1.3189 level, which is extended by an upward trendline on a 2-hour timeframe. The Cable has recently crossed over the resistance level of the 1.3185 resistance level as the candle’s closing above this level may drive further upward movement in the market. The MACD and RSI support buying trend, and considering the trendline support and oversold indicators, it is worth giving a buy shot to GBP/USD pair. Let’s consider buying over 1.3160 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.565 after placing a high of 105.135 and a low of 104.361. The pair followed its previous day’s bearish trend and dropped for 3rd consecutive day on Monday. The USD/JPY pair surged to its previous daily high level on Monday in early trading hours after the news from another drug maker came in about their vaccine’s efficiency. The Moderna reported that its vaccine’s last stage clinical trials were 94.5% effective. After this news, Moderna became the second company to announce its results from last stage clinical trials.

This news raised the risk sentiment in the market and weighed on the safe-haven Japanese Yen that kept the USD/JPY pair higher at the beginning of the Asian session. However, the gains started to fade as the market participant realized the difficulty of vaccine availability and its usage. The vaccine requires -70C temperature to be stored to be transported, that is not an easy task. Furthermore, there was also a lack of information regarding the time duration for the immunity induced through the vaccine. This can only be ascertained after the vaccine becomes available to the general public for usage.

These uncertainties raised the market’s safe-haven status and supported the Japanese Yen that ultimately weighed on the USD/JPY pair and forced it to lose some of its earlier daily gains. Meanwhile, on the U.S. front, the U.S. dollar was also weak on the day as the rising number of coronavirus cases raised fears for further restrictions and raised the hopes for further stimulus aid from the government.

The global cases of coronavirus reached 54 million, out of which 11 million were reported from the United States, according to the Johns Hopkins University. The rising number of coronavirus in the United States raised hopes that the Fed will announce further easing or a larger monetary aid to support the economy after the victory of Joe Biden in the U.S. presidential election this month.

Biden always favors a larger stimulus package to provide strength to the economy through the coronavirus crisis. With him becoming the U.S. 46th President, the chances for a massive stimulus bill for the U.S. economy have increased, which started to weigh on the U.S. dollar and ultimately dragged the USD/JPY pair’s prices on the downside.

On the data front, the Prelim GDP Price Index from Japan was released at 04:50 GMT that raised to 1.1% in the 3rd quarter against the expected 1.0% and supported the Japanese Yen that ultimately added further losses in the USD.JPY pair on Monday. The Prelim GDP for the 3rd Quarter from Japan also raised to 5.0% against the projected 4.4% and supported the Japanese Yen that dragged the USD.JPY pair on the downside. On the U.S. front, the Empire State Manufacturing Index in November dropped to 6.3 from the projected 13.8 and weighed on the U.S. dollar that dragged the USD/JPY pair further on the downside.

Daily   Technical Levels

Support Resistance

104.24      105.02

103.91      105.47

103.46      105.81

Pivot point: 104.69

USD/JPY – Trading Tips

The USD/JPY is with a bearish bias at the 104.400 level, falling from the 104.850 support area. On the lower side, the USD/JPY pair is likely to find support at the 104.141 level, and violation of this level can also extend further selling boas until 103.500. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.845 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck! 

Categories
Forex Fundamental Analysis

The Impact Of The ‘US Redbook’ News Release On The Forex Market

Introduction

Introduction

Introduction

The growth in any economy is primarily driven by the growth of retail sales to households. For this reason, monitoring retail sales data can be the most suitable way of gauging if the economy is expanding or not. In most national retail sales data, the data is collected through surveys. However, having an index solely based on the growth of same-store sales can help provide a more accurate sense of growth in the retail industry.

Understanding US Redbook

Redbook Research Inc. is an American company primarily dealing with market research on the momentum of retail sales, macro and quantitative analysis, and consumer demand factors in public and private retail sectors. The company publishes the Johnson Redbook Retail Sales Index, also known as the US Redbook, which is considered one of the most respected proprietary indicators on retail sales in the US.

The Redbook index measures the growth in the US retail sector. The index uses a sales-weighted of the year-over-year growth in sales of the same store. About 9000 large general merchandise stores primarily operating in the US retail sector are sampled. When these sampled stores’ monetary value is measured, their combined output accounts for about 80% of the national retail sales. Note that in the US, the official government retail sales data is compiled and released by the Department of Commerce.

The Redbook index is published weekly. In this publication, the report extensively analyses and explains the current trends in retail sales and the economy. Since households’ demand is highly elastic, the weekly US Redbook publication can capture the most recent trends in consumer demand. Thus, the Johnson Redbook Retail Sales Index provides advance data on the trends in retail sales in the US.

In this report, the comprehensive analysis covers the sales in the current month, the quarterly sales, year-on-year and annual sales, company rankings, and data on historical sales. The 9000 retailers are categorized into; Apparel Specialty, Sporting Goods, Home Improvement, Home Furnishings, Books, Toy & Hobby, Department, Discount, Footwear, Furniture, Drug, Electronic, Jewellery, and Miscellaneous.

Using US Redbook in Analysis

We have already established that the US Redbook’s retail index provides a comprehensive and advance trend in household consumption patterns.

When the weekly US Redbook retail index increases, it means that households’ consumption is on the rise. At its core, higher levels of consumption are driven by increased disposable income in the economy. An increase in household consumption means that there is a general increase in demand in the economy. When households’ demand increases, it could mean that the economy’s unemployment levels have reduced. Since more people are gainfully employed, there is increased disposable income for households, hence the increase in consumption represented by the rise in the Redbook index. Similarly, it could also mean that wages received by households are increasing, which increases disposable income.

Conversely, when the weekly Redbook retail index drops, it means that households have reduced disposable income. The reduction in disposable income could directly result from increasing levels of unemployment or a reduction in wages received by households. With less disposable income, people will be forced to cut back on their consumption. In both these cases, the US Redbook retail index increase implies that the economy is expanding; conversely, a drop in the index shows that the economy is contracting.

Source: Trading Economics

The US Redbook retail index can also be used as a precursor to economic recessions and recoveries. We already know that the majority of growth in the economy is driven by consumer demand. It is estimated that household consumption accounts for up to 70% of economic growth. Now, picture this. When the consumer demand is consistently dropping, suffice to say the GDP should also be expected to drop significantly. This period will be marked by a reduction in production and increased unemployment levels. Note that recession is described as a consistent drop in GDP for two successive quarters.

Source: St. Louis FRED

At the onset of the 2020 coronavirus pandemic, the weekly US Redbook retail index continuously dropped. From the period between March to May, the index dropped steadily. This period coincided with a drop in the US GDP. Due to the nationwide imposed lockdowns and social distancing rules, unemployment surged to historic highs of 14.7%. Naturally, demand in the economy was depressed.

In times of recessions, the US Redbook retail index can be handy in changes in household consumption. Policymakers can implement several expansionary policies meant to stimulate the economy. Since the official government retail sales data is published monthly, the US Redbook can be used to show any immediate response by households. The US Redbook index can therefore be used to show if the expansionary policies are working as they are expected to. One such instance can be seen after the US government implemented the 2020 stimulus package worth $2 trillion. The US Redbook retail index can be seen to be rising from the lowest points of May 2020.

Impact of US Redbook on USD

When the US Redbook retail index increases, we can expect the USD to appreciate relative to other currencies in the Forex market. A consistently rising index implies that the economy is steadily expanding, the unemployment rate is falling, and there is a general increase in money in the economy. In such a situation, governments and central banks might step in with contractionary fiscal and monetary policies. These policies are meant to prevent the economy from overheating and avoid unsustainable inflation levels due to the increase in the money supply. Such policies make domestic currency appreciate.

Conversely, a dropping US Redbook retail index shows that the general economy might be contracting. Consequently, expansionary fiscal and monetary policies like lowering interest rates might be implemented to stimulate the economy. Such policies make the domestic depreciate relative to others.

Sources of Data

Redbook Research Inc. published the weekly, monthly, and annual US Redbook Retail Sales Index. In-depth and historical data on the US Redbook Index is available at Trading Economics.

How US Redbook Index Release Affects The Forex Price Charts

Redbook Research Inc. published Retail Sales Index the latest data on October 20, 2020, at 8.55 AM EST. The news release can be accessed at Investing.com. This release is expected to have a low impact on the USD.

The MoM index increased by 1.0% in the latest publication compared to 0.4% in the previous reading. Similarly, the YoY index showed an increase of 2.5% compared to the previous 1.2%.

Let’s find out if this release has an impact on the USD.

EUR/USD: Before US Redbook Release on October 20, 2020, just before 8.55 AM EST

Before the release of the US Redbook data, the EUR/USD pair was trading in an almost neutral trend. The 20-period MA is seen to be flattening with candles forming just around it.

EUR/USD: After US Redbook Release on October 20, 2020, at 8.55 AM EST

The EUR/USD pair formed a 5-minute bearish candle immediately after the publication of the US Redbook report. Subsequently, the pair continued trading in the earlier observed subdued uptrend.

Bottom Line

This article has established that the US Redbook report is a crucial leading indicator of retail sales and consumer demand. However, in the forex market, its significance is diminished since most traders pay close attention to the US Department of Commerce’s monthly retail sales data.

Categories
Forex Assets

Exploring The Costs Involved While Trading The AUD/HUF Forex Exotic Pair

Introduction

Introduction

Introduction

The AUD/HUF pair is an exotic forex pair with the AUD representing the Australian Dollar and the HUF representing the Hungarian Forint. When trading in such an exotic currency pair, forex traders should anticipate higher volatility. The base currency in this pair is the AUD, while the HUF is the quote currency. Hence, the exchange rate of the AUD/HUF represents the amount of HUF that a single AUD can purchase. If the exchange rate of AUD/HUF is 221.51, it means that you can buy 221.51 HUF using 1 AUD.

AUD/HUF Specification

Spread

One of the ways forex brokers earn their revenue is through the spread. This is the difference in value between the price they sell a currency pair to you and the price at which they buy the same pair from you.

The spread for the AUD/HUF pair is – ECN: 22 pips | STP: 27 pips

Fees

For traders with the ECN account, they get charged a fee for opening positions. Note that not all brokers charge this commission. Forex brokers do not charge a fee on STP accounts.

Slippage

Every forex broker has different execution speeds. In times of high volatility, your order may be executed at a price other than the one you requested. This difference is slippage.

Trading Range in the AUD/HUF Pair

The trading range in forex trading is used to analyse the fluctuation in the price of a currency pair across multiple timeframes. The volatility, as measured with the trading range, is pips from the minimum, average, to the maximum for all timeframes. With this information, you can deduce the most profitable timeframes to trade.

The Procedure to assess Pip Ranges

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

AUD/HUF Cost as a Percentage of the Trading Range

Now that we’ve established the volatility,  we can proceed to calculate the trading costs incurred when trading these timeframes. The trading cost is expressed as a percentage of total costs to the volatility.

Below are the trading costs of the AUD/HUF pair for both ECN and STP accounts.

ECN Model Account costs

Spread = 22 | Slippage = 2 | Trading fee = 1

Total cost = 25

STP Model Account

Spread = 27 | Slippage = 2 | Trading fee = 0

Total cost = 29

The Ideal Timeframe to Trade  AUD/HUF Pair

From the above analyses, we can see that the trading cost of the AUD/HUF pair decreases with an increase in volatility. Since the volatility also increases with the timeframe, trading the AUD/HUF over longer timeframes incurs lower costs.

Although the lower timeframes have higher trading costs, these costs can be reduced by timing trades when volatility approaches the maximum. Furthermore, slippage costs can be avoided if traders use forex limit order types. With the forex limit orders, trades are executed at precise price points, avoiding the impact of slippage. Let’s look at an example of this using the ECN account.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee

= 0 + 22 + 1 = 23

Notice that the trading costs have been reduced in all timeframes. For example, the highest cost has been lowered from 423.73% to 389.83%.

Categories
Forex Course

175. Understanding ‘Market Sentiment’ In The Forex Market

Introduction

Introduction

Introduction

By now, you have come across terms like bear markets, bull markets, and neutral markets. At their core, these terms represent market sentiment. In this lesson, we will learn about market sentiment in forex and what brings it about.

What Is Market Sentiment?

Forex traders execute their trades based on how they think the market will move. If you are a forex trader, for whatever your reasons, you must have thought at some point, “…I think the price for the GBP/USD will rise, let me go long on the pair.” This decision was your sentiment about that particular currency pair. By making that trade, you have expressed your sentiment about the currency pair.

However, not every other forex trader would have agreed with you that the price for the GBP/USD would rise. Some forex traders thought the pair would fall and go short. Hence, at any given moment, some traders will hold the assertion that a given currency pair will rise while others claim that the pair will drop. Therefore, at any given moment, there will always be traders favoring going either long or short. Those who are in the majority form the market sentiment.

Therefore, market sentiment is the overall belief of the majority of traders. In the forex market, the market sentiment is the dominant consensus by active traders about a particular currency.

Types of Forex Market Sentiment

Bullish market sentiment occurs when most traders believe that the price for a particular currency pair will rise, and they go long.

Bearish market sentiment occurs when more forex traders short a currency pair because they believe that the price will fall.

Neutral market sentiment occurs when an equal number of traders are going long and short on the same currency pair.

What brings about market sentiment in forex?

In the forex market, sentiments express the outlook of traders about a particular currency or currency pair. Thus, the two main drivers of market sentiment in the forex markets are geopolitical developments and fundamental economic indicators.

Geopolitics

Unexpected political events may impact the future of a country’s economic prospects. In the current climate, some of the significant geopolitical developments that affect market sentiment in forex include; Brexit, the Sino-American trade war, and the 2020 US presidential elections.

Let’s look at Brexit, for instance. In September 2020, there has been increased pessimism about Brexit negotiations with the UK threatening not to honor an earlier agreement with the EU. To forex traders, this increases the chance that the UK will not secure favorable trade deals and also ruin its reputation globally. Since this poses a risk for the UK economy, market sentiment was bearish on the GBP.

Fundamental Economic Indicators

These indicators show how the economy has fared. They show if the economic condition of a country has been growing, stagnating, or worsening. Forex traders base their market sentiments by making their judgments about the economy’s future, depending on how they interpret the publication of these indicators.

If an economic indicator, say unemployment rate, is better than what analysts predicted, it shows that the economy is expanding hence better prospects. When the fundamental indicators are positive, forex traders will adopt a bullish stance on that country’s currency. Conversely, negative fundamental data leads to a bearish sentiment on the currency.

[wp_quiz id=”89638″]
Categories
Crypto Videos

Should You Trade Forex With A Smart Phone Or Tablet? Our Free Signals App In The Description!

https://youtu.be/sPibZxfAkxg

https://youtu.be/sPibZxfAkxg

Should you trade forex with a smartphone or tablet app?

 

In this session, we will be looking at whether or not new traders, in particular, should trade with a mobile phone or tablet app only?

Regulated brokers in the United Kingdom must display the following message on their website, giving the updated statistics on the percentage of retail investor accounts, which lose money when trading spread bets or contracts for difference.

This is one we copied from IG index.
‘’Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.’’
The message is stark; three-quarters of retail traders burning their accounts is huge. And so most brokers rely on a revolving door of new traders coming in, while others bow out having lost their funds.
The reason is simple, a lack of knowledge by retail traders, the majority of whom are not much more than gamblers, and the house always wins in the end.

Let’s get back to the topic headline, should you trade forex with a smartphone or tablet app only.
More and more people are downloading trading apps as provided by brokers, trading, often on the go, maybe at work in an unrelated industry, or while at the gym or going for a walk or perhaps shopping, and spot a trade on their app and have a punt.

Now they might get lucky, occasionally, and think they have picked up a great new secondary source of income. Still, the whole thing about trading is that it is not like gambling, if you go into a casino and have a punt on the roulette wheel, maybe you will pick the right number, or maybe you will pick black, and the ball falls on the right black number, and you’ll be lucky, and that will be: all it is luck. However, with trading, it’s all about learning about fundamental analysis, learning about technical analysis, keeping abreast of economic data releases, speeches by key policymakers, and considering market analysis by professional traders and economists. Now traders are stacking the odds in their favor in order to have much more chance of a successful outcome.

And so, 25% of traders who are not losing money are highly likely those who do not trade on mobile phones or tablet apps. They will probably have at least two decent size computer screens for analysis purposes, perhaps also a tablet to keep them up to speed with economic news, where they are constantly juggling between technical analysis setups and market-related information in order to be informed.
A mechanic would not work on a car engine with only a screwdriver, and a surgeon would not operate on a person with only a scalpel to hand.
In conclusion, the more tools a trader has at his or her disposal, the better chance they will have of being on the 25% side of the above statistic.

Categories
Forex Videos

Has Time Run Out For The BrexitFuture Trade Deal? GBP On The Ropes!

https://youtu.be/IhX2wZw8DBw

https://youtu.be/IhX2wZw8DBw

Has time run out for the Brexit future trade deal? Where next for the Pound?

Thank you for joining this forex academy educational video.

The British government set itself a deadline of 15th of October with which to had a formal future, a tariff-free trade deal with the EU by the 15th October 2020.
That deadline came and went and was subsequently extended to the 13th of November, where, at the time of writing, no such agreement is in place. The United Kingdom is set to leave the European Union transition period on the last day of 2020. With both the European Union chief negotiator Michael Barnier, and the UK’s chief negotiator on this issue, David frost, both proclaiming that the other side needs to move on key issues such as fisheries, I need a so-called level playing field, it is highly unlikely that a deal can be reached in time I’m for the legal framework to be set in place whereby any such new tariff 3 agreement can be implemented on the 1st day of January 2021.
So, what are the options? The UK government cannot extend the negotiation period because the end of the transition period date is set into law. And so if they will not budge on the requirements and terms of a future trading partnership with the EU, it will appear that the British will be leaving on WTO, or world trade organization, terms, and it is perceived that this would be bad for the British economy, whereby a tariff-free arrangement with the European Union would be in the best interests of both sides because it would offer a smoother, future, trading arrangement.
Let’s have a look at how this is being played out in the forex market, where the most widely traded British pound pair is the GBPUSD.

This is a daily chart for the pair. And we note and expansive bull channel, which has been conforming since the middle of May 2020. This tells us that price action has been fuelled by the potential of a future tariff-free trade deal with the EU. The overall price action has been to the upside. Although this has been waning since early September, such as position ‘A’ and the most recent high was at 1.33.

However, if we bring that daily time frame down to the 4-hour chart, we now see that although price action was waning to the upside at position A on the 1-hour chance, price action for that period has been conforming to an expanding bearish channel on the 4-hour chart.

Now let’s look at what has been happening for the pair are on a 1-hour chart over the last 8 days. Here we can see that price action has been conforming to this triangle where initially we have a bull run up to a peak of just above 1.3300. Since then, price action has been falling lower, to just above 1.3100, and where price action is now conforming to the fundamentals with regard to the potential of a no tariff future trading arrangement deal Brexit.

As time runs out, with no sides giving up any grounds in order to compromise for the sake of a future tariff-free trading relationship, the pair will continue to come under pressure to the downside, in which case the pound is likely to lose value against its counterparts and especially with the United States dollar, notwithstanding the fact that the US economy is suffering because of the covid pandemic and where 150,000 cases were reported in a single day this week, heaping more pressure on the federal government to find fiscal solutions to this problem, which is not going away anytime soon.

Categories
Forex Signals

AUDJPY: Breakout after Consolidation

The AUDJPY pair has moved in a bullish sequence that started in the end week of October and ended with a sharp and large 4H candle on Nov 09. There it began a consolidation cycle that started as a sideways move and finally retraced pushed by the selling pressure to near the begging of the last bullish 4H Candle. From there, it is making an upward movement that is supported by its 50-period SMA.

The AUDJPY pair has moved in a bullish sequence that started in the end week of October and ended with a sharp and large 4H candle on Nov 09. There it began a consolidation cycle that started as a sideways move and finally retraced pushed by the selling pressure to near the begging of the last bullish 4H Candle. From there, it is making an upward movement that is supported by its 50-period SMA.

The AUDJPY pair has moved in a bullish sequence that started in the end week of October and ended with a sharp and large 4H candle on Nov 09. There it began a consolidation cycle that started as a sideways move and finally retraced pushed by the selling pressure to near the begging of the last bullish 4H Candle. From there, it is making an upward movement that is supported by its 50-period SMA.

Chart 1 – AUDJPY 4H Chart.

We see that the primary trend is still bullish. The 1H chart also shows the recent leg of upward movements with higher highs and lows (which define a bullish trend). We also observe that following the last bullish candlestick, there are several consolidation candles that retrace, but the closes are not trespassing the 50-hour SMA. Now, we see the strength is coming again, and the Voss Predictor indicator also shows a trend shift that could forecast a visit to the highs made in the recent past.

Chart 2 – AUDJPY 1H Chart.

The setup

Although we suspect that a new upward phase is just beginning, the setup also considers a confirmation in the form of a breakout of the recent range; thus, the entry signal is a buy-stop order at 76.324, with a 31 pip stop-loss that would trigger if the price goes below the low of the last 1H bullish candle (76.014). The take-profit level is set at 76.774, which is in the region of the last highs. The reward/risk ratio is a decent 1.45.

Trade Summary

Entry: Buy-Stop: 76.324

Stop-Loss: 76.014

Take-Profit: 76.774

Risk and Reward

This trade’s risk is 31 pips, which is 296 USD per traded lot, 29.6 USD per mini-lot, and 2.96 USD per lot. A trader willing to risk 1 percent on each trade should trade about 3 micro-lots every $1,000 on his trading account.

 

Categories
Forex Fundamental Analysis

What Is Long Government Bond Auction and What Should You Know About It?

Introduction

Introduction

Introduction

Every government must finance its expenditures with a mixture of debt and revenue. Through debts, governments issue a mixture of short-term and long-term debt instruments to the public. When these debt instruments are being issued, they have an interest rate, one which government will pay the debt holders until maturity. For economists and financial market analysts, the interest rate paid can be used to analyze the government’s creditworthiness and the expected rate of inflation.

Understanding Long Term Bond Auction

A bond in finance is a fixed-income asset issued by an entity to borrow money from investors. Investors get to receive a fixed interest depending on the quantity they purchase. This fixed interest, called a coupon,  is usually paid at predetermined intervals until the bond reaches maturity.

Maturity is the duration in which an investor must hold the bond before they can redeem and get their principal back. It is the bond’s maturity that determines whether it is categorized as a short-term or long-term bond.

Long-term bonds are bonds that have maturities of more than one year.

On the other hand, long bonds are bonds with the longest possible maturity that the issuer can issue. For most governments, long bonds usually have a maturity of up to 30 years.

Long bond auction refers to when bond issuers offer the sale of long bonds to the public. It is at these actions where the rate is fixed. This rate is what bondholders will receive for holding the long bonds until maturity.

Bond yield is the return an investor can expect to receive from buying a bond. The bond yield usually comes into consideration when the bond starts trading in the secondary market. We will later see how this yield can be used for analysis.

Here is a list of long government bonds for the developed economies.

  • Austria 10-year bonds
  • The US 30-year bonds
  • Dutch 10-year bonds
  • Portugal 10-year bonds
  • Spain 50-year Obligation
  • France 30-year OAT
  • UK 30-year Treasury Gilts
  • Germany 30-year Bunds
  • Italy 30-year BTPs

The rate attached to these long bonds during auctions can tell us a lot about investor sentiment of these economies.

Using Government Long Bond Auction in Analysis

The rate ascribed to the bond at auction is what bondholders will expect to receive at predetermined intervals until maturity. Comparing this rate with the rates on past auctions, we can form an opinion about the debt situation of the country and the expected rate of inflation by the investors.

For investors, buying a bond is the equivalent of owning an asset that has a predetermined future cash flow. Since it is virtually unheard of for governments to default on interest rate payments or the repayment of principal upon maturity, long government bonds can be said to be risk-free. With this in mind, the only potential risk that bondholder faces is inflation. In fact, inflation has been called the “bond’s worst enemy.”

You see, a rise in inflation means that some percentage will erode the future purchasing power of money. This erosion of the value of future cash flows means that investors must demand a higher interest rate at long bond auctions. At the back of their minds, investors envision that the rate they demand at bond auctions must also include the expected inflation rate. Effectively, higher rates on bonds help mitigate the erosion in purchasing power of their future cash flows.

Source: St. Louis FRED

At the auction, the bond buyers would feel the need to bid for higher rates if they believe that the rate of inflation will remain relatively stable. In this scenario, they can be assured that the purchasing power of their expected cash flows won’t be eroded. So, what does long bind auction tell us about inflation? The rate at an auction will increase compared to the previous auction if investors believe that future inflation will rise. Conversely, the rate at the auction will decrease when investors hold the conviction that future inflation will remain relatively stable.

The other way government long bond auction can be used for analysis is by using the bond yield. For most economists and financial analysts, the yield is the most closely monitored aspect of a bond. The reason for this is because bond yield offers broad information about a country’s debt situation. Here’s the formula for calculation the bond yield.

Let’s use some simple calculations to illustrate how this works.

Say when the bond is being issued, it has a price of $1000 with an annual coupon payment of $50. Remember that the coupon payments are fixed and cannot change; investors can expect to receive this $50 until maturity.

In this case, the bond yield is 50/1000 * 100 = 5%

Now, imagine that the economic situation of a country is worsening, and it becomes increasingly indebted. In this case, the price of the bond will decrease, let’s say to $900, which means that the yield on the bond increases to 5.56%. Conversely, if the country’s economic performance improves, the bond prices will increase, meaning that the yield will fall. In our example, if the price increased to $1050, the yield will decrease to 4.76%.

Impact of Government Long Bond Auction on Currency

Using the yield on the long government bonds published during an auction, we can determine the economic performance. Therefore, when the yield increases, it means that economic performance in the country is worsening. To forex traders, this can be taken as a deep-seated economic contraction, which will make the domestic currency depreciate relative to others. On the other hand, if the yield falls during an auction, it could be considered a sign of economic prosperity. In this case, the domestic currency will appreciate.

Sources of Data

Globally, the central banks are responsible for auctioning long government bonds. Trading Economics has an exhaustive list of global government bonds and their yields. The United States Department of the Treasury, through TreasuryDirect, publishes the data on the US bond auctions.

How Government Long Bond Auction Affects The Forex Price Charts

The recent auction of the US 30-Year Bond was on October 8, 2020, at 1.00 PM EST and accessed at Investing.com. Low volatility is expected upon the release of the auction date.

In the October 8, 2020, auction, the yield on the US 30-year bond auction was 1.578% higher than the 1.473% of the previous auction.

Let’s see if this auction impacted the USD.

EUR/USD: Before Government Long Bond Auction on October 8, 2020, 
just before 1.00 PM EST

The EUR/USD pair was trading in a steady uptrend before releasing the US 30-Year Bond Auction yield. The 20-period MA can be seen rising with candles forming above it.

EUR/USD: After Government Long Bond Auction on October 8, 2020, at 1.00 PM EST

The pair formed a 5-minute bearish “hammer” candle immediately after the publication of the US 30-year bond yield. Subsequently, the pair traded in a subdued uptrend. The release of the data had no impact on the USD.

The auction of long government bonds serves a vital role in the economy. However, as we have observed in the above analyses, their impact on the forex market is not significant.

Categories
Forex Assets

Costs Involved While Trading The AUD/PHP Forex Exotic Pair

Introduction

Introduction

Introduction

In this exotic forex pair, the AUD is the Australian Dollar, and the PHP is the Philippine Peso. Note that trading with such exotic pairs is accompanied by periods of high volatility compared to major forex pairs. The AUD is the base currency, while the PHP is the quote currency. Therefore, in forex trading, the price of the AUD/PHP represents the amount of PHP you can purchase using 1AUD. Say that the price of AUD/PHP is 34.057. It means that with 1 AUD, you can buy 34.057 PHP.

AUD/PHP Specification

Spread

In the forex market, when going long, you buy a currency pair from the broker at a “bid” price. When you go short, you sell the currency pair to the broker at the “ask” price. The difference between the two prices is the spread.

The spread for the AUD/PHP pair is – ECN: 10 pips | STP: 15 pips

Fees

Forex traders using ECN type accounts get charged a trading fee by their brokers depending on the size of their position. STP type accounts rarely attract any trading fees from the brokers.

Slippage

If you have ever opened a trade during periods of increased volatility, you will notice that your order price differs from the execution price. This difference is slippage. It can also be caused when your broker is slow to execute your order.

Trading Range in the AUD/PHP Pair

The trading range refers to the analysis of the fluctuation of a currency pair over various timeframes. With the trading range, we can determine volatilities from minimum to the maximum across all timeframes. This information will be useful in deciding profitability across these timeframes.

The Procedure to assess Pip Ranges

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

AUD/PHP Cost as a Percentage of the Trading Range

The percentage of the trading range is when we take the total costs associated with trading a particular pair and express it as a percentage of the volatility. Below are the percentage of the trading range for ECN and STP accounts.

ECN Model Account costs

Spread = 10 | Slippage = 2 | Trading fee = 1

Total cost = 13

STP Model Account

Spread = 15 | Slippage = 2 | Trading fee = 0

Total cost = 17

The Ideal Timeframe to Trade  AUD/PHP Pair

We can observe from the above analyses that longer timeframes produce higher volatilities. More so, as the volatility increases, the trading costs decrease. Therefore, shorter-term traders of the AUD/PHP pair experience higher trading costs than longer-term traders.

However, trading costs can be reduced if traders were to open their positions when the volatility is approaching the maximum. Notice that across all timeframes, the trading costs are lower when volatility changes towards the maximum. Furthermore, using forex limit order types can be used to lower trading costs. Such order types eliminate the slippage costs. Here’s a demonstration.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee

= 0 + 10 + 1 = 11

By getting rid of the slippage costs, we have effectively lowered trading costs across all timeframes.

Categories
Forex Course

174. Summary – Multiple Timeframe Analysis

Introduction  

Introduction  

Introduction  

This lesson is basically an overview of what we have covered so far in the Multiple Timeframe series. Multiple timeframe analysis in forex is observing the price action of a selected currency pair under different timeframes. Most forex brokers will provide you with several timeframes. These timeframes are categorized in minutes from 1-minute timeframe to 30-minute timeframe, hourly timeframes from 1-hour timeframe to 12-hour timeframe, the daily timeframe, weekly timeframe, and the 1-month timeframe.

Everything we learned so far!

As we discussed in our first lesson, multiple timeframe analysis involves using at least three timeframes to make a trade. A longer timeframe is used to establish the dominant market trend. Depending on your forex trading style, this dominant trend is used as the prevailing primary trend to anchor your trades. The rationale behind using the longer timeframe to establish the primary trend is because longer timeframes take long to be formed and are not susceptible to the micro fluctuations in price.

The dominant trend is broken down using a medium timeframe to establish the magnitude of the trend. Finally, a shorter timeframe is used as a trigger timeframe by finding the best points to enter and exit a trade. The most common technique of trading multiple timeframes in the forex market is trading three timeframes.

Trading multiple timeframes in forex, therefore, means using multiple timeframe analysis to inform your trading decision. The choice of timeframes used in your analysis entirely depends on the type of forex trader you are.

The table below summarises the type of forex trader and the preferred timeframes.

Note that the above table is merely a guideline. We recommend selecting your desired timeframes for analysis based on your trading style and comfort of analysis. Therefore, the best timeframes to trade in forex will depend on factors such as market volatility and your trading style.

Some of the importance of multiple timeframe analysis in forex include:

  • The ability to determine the magnitude and significance of economic indicators;
  • Identifying support and resistance levels which aid to execute various forex orders and in setting ‘take profit’ and ‘stop-loss’ levels;
  • Helps to identify market trends and their magnitude at a glance quickly; and
  • Helps in forex forecasting by eliminating the lagging effects of most technical forex indicators.
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Categories
Forex Market Analysis

Daily F.X. Analysis, November 16 – Top Trade Setups In Forex – ECB President Lagarde Speaks!

The eyes will remain on the ECB Financial Stability Review, and President Lagarde Speaks on the news front. The ECB Financial Stability report is an assessment of conditions in the financial system and potential risks to financial stability – the evidence on strains and imbalances can provide insight into monetary policy’s future. Therefore, traders keep a closer eye on reports to predict policy decisions to cope with Covid19 driven economic slowdown.

The eyes will remain on the ECB Financial Stability Review, and President Lagarde Speaks on the news front. The ECB Financial Stability report is an assessment of conditions in the financial system and potential risks to financial stability – the evidence on strains and imbalances can provide insight into monetary policy’s future. Therefore, traders keep a closer eye on reports to predict policy decisions to cope with Covid19 driven economic slowdown.

The eyes will remain on the ECB Financial Stability Review, and President Lagarde Speaks on the news front. The ECB Financial Stability report is an assessment of conditions in the financial system and potential risks to financial stability – the evidence on strains and imbalances can provide insight into monetary policy’s future. Therefore, traders keep a closer eye on reports to predict policy decisions to cope with Covid19 driven economic slowdown.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD currency pair managed to extend its previous 2-day gaining streak and remained bullish around near above mid-1.1800 level, mainly due to the broad-based U.S. dollar selling bias, triggered by the risk-on market sentiment, which keeps the currency pair higher. Hence the market trading sentiment was being supported by the coronavirus vaccine-led enthusiasm. 

On the contrary, the buying interest around the currency pair was capped by the intensifying virus fugues in Europe, which raised doubts over the Eurozone economic recovery and became the key factor that has been capped further upside in the currency pair. At the moment, the EUR/USD currency pair is currently trading at 1.1849 and consolidating in the range between the 1.1834 – 1.1854.

Despite the doubts over the global economic recovery from intensifying coronavirus (COVID-19) woes in the U.S. and Europe, the market trading sentiment flashing green at the start of the week’s trading and remained supportive by the optimism over a potential vaccine for the highly infectious coronavirus disease. After cheering the U.S. pharma giant Pfizer’s recent declaration of its coronavirus vaccine’s positive results, the market traders expect the biotechnology company Moderna to follow suit this week. This, in turn, the futures tied to the S&P 500, Wall Street’s benchmark index, is currently trading 0.8% higher on the day and the major Asian indices are up at approximately 1% each. 

At the USD front, the broad-based U.S. dollar failed to gain any positive traction on the day as doubts persist over the global economic recovery from COVID-19. Besides this, the risk-on market sentiment, backed by the optimism over a potential vaccine for the highly contagious coronavirus disease, also played its major role in weakening the safe-haven U.S. dollar. However, the U.S. dollar losses became the key factor that kept the currency pair’s higher. Meantime, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped by 0.14% to 92.588 by 10:05 PM ET (2:05 AM GMT).

On the contrary, the bullish bias around the EUR/USD currency pair was capped by the on-going doubts over the Eurozone economic recovery amid intensifying coronavirus (COVID-19) worries in the U.S. and Europe. The rising coronavirus (COVID-19) worries urged some European countries, such as the U.K. and France, to imposing restrictive measures such as lockdowns and curfews. As in result, the vehicle traffic in both Europe and the U.S. slowing sharply. As per the latest report, there were over 54 million cases across the globe and over 1.3 million deaths as of November 16.

Looking ahead, the market traders will keep their eyes on updates surrounding the U.S. stimulus package. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, could not lose their importance. Apart from this, the RBA Gov Lowe Speaks and Monetary Policy Meeting Minutes will also be key to watch.

Daily Technical Levels

Support   Resistance

1.1738      1.1827

1.1697      1.1875

1.1648      1.1917

Pivot point: 1.1786

EUR/USD– Trading Tip

The EUR/USD traded bullish at 1.1850 level, but recently it has formed a Doji pattern followed by bullish candles, suggesting that the buyers are exhausted, and sellers may enter the market soon. Therefore, we can expect the EUR/USD price to trade bearish until the 1.1838 level, the support level extended by an upward trendline on the hourly timeframe. Bullish crossover of 1.1856 level can also trigger buying until 1.1880.

GBP/USD – Daily Analysis

The GBP/USD currency pair managed to extend its overnight winning streak and refreshed 4-day high around above 1.3200 level as the currency pair buyers get a warm welcome after returning from the weekend. However, the bullish tone around the currency pair could be attributed to the broad-based U.S. dollar weakness. The U.S. dollar was being pressured by the market risk-on sentiment, undermining the safe-haven U.S. dollar and contributing to the currency pair gains. 

Whereby, the market trading sentiment has remained supportive by the renewed optimism over a possible vaccine for the highly infectious coronavirus disease, which lends some support to the higher-yielding Pound and contributes to the currency pair gains. On the contrary, the Brexit woes and the virus concerns could stop the currency pair’s on-going recovery moves. At this particular time, the GBP/USD currency pair is currently trading at 1.3234 and consolidating in the range between 1.3174 – 1.3235.

Despite the lingering doubts about global economic recovery and the intensifying tension between the world’s two biggest economies, the market players continue to cheering the optimism over a possible vaccine for the highly infectious coronavirus disease. In the meantime, the release of an above-forecast China factory data, which raised hopes of China’s economic growth, has also played its major role in underpinning the market trading sentiment. However, the risk-on mood slightly overshadowed the concerns over virus cases and restrictions in the U.S. 

On the data front, the Industrial production in China’s economy surged 6.9% year-on-year for the 2nd-straight month in October, surpassing the expected gain of 6.5%. Moreover, the Fixed Asset Investment grew 1.8% year-on-year in October against 1.6% expected and 0.8% previous. 

As a result, the higher-yielding British Pound took support from the risk-rally by ignoring the Brexit issue’s latest negative developments. As per the latest report, the discussions over a possible trade deal between the U.K. and E.U. are expected to extend beyond this week.

At the USD front, the broad-based U.S. dollar failed to stop its previous losses and remain depressed on the day, mainly due to the risk-on market sentiment. Moreover, the losses in the U.S. dollar could also be attributed to the on-going doubts over the global economic recovery in the wake of intensifying coronavirus (COVID-19) worries in the U.S., which tend to undermine the American currency. However, the losses in the U.S. dollar kept the currency pair higher. Meantime, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped by 0.14% to 92.588 by 10:05 PM ET (2:05 AM GMT).

 

On the negative side, the latest negative developments surrounding the Brexit issue and the rising number of coronavirus in the U.K. could be considered the leading factor that kept the lid on a y additional gains in the currency pair. As per the latest report, Irish Foreign Minister Simon Coveney clearly warned that we would not get a deal if the U.K. imposes Internal Market Bill. In the meantime, the U.K. Environment Secretary George Eustice stated that both sides’ agreement remains intact, keeping the hopes alive as differences continue to persist over fisheries and state aid.

Looking ahead, the market traders will keep their eyes on updates surrounding the U.S. stimulus package. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, could not lose their importance. Apart from this, the RBA Gov Lowe Speaks and Monetary Policy Meeting Minutes will also be key to watch.

Daily Technical Levels

Support   Resistance

1.3170      1.3291

1.3119      1.3361

1.3050      1.3412

Pivot point; 1.3240

GBP/USD– Trading Tip

The GBP/USD pair is trading at 1.3208 level, holding over 1.3189 level, which is extended by an upward trendline on a 2-hour timeframe. The Cable has recently crossed over the resistance level of the 1.3185 resistance level as the candle’s closing above this level may drive further upward movement in the market. The MACD and RSI support buying trend, and considering the trendline support and oversold indicators, it is worth giving a buy shot to GBP/USD pair. Let’s consider buying over 1.3160 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.121 after placing a high of 105.476 and a low of 105.068. The pair USD/JPY reversed its direction and started falling on Thursday amid the broad-based U.S. dollar weakness. The decreased risk sentiment due to the escalated second wave of the coronavirus in the United States weighed on the USD/JPY pair on Thursday. The investors started to fear that governments might respond by imposing the lockdown restrictions that will slow down the economic recovery.

The United States reported about 140,453 cases on a single day on Wednesday, and it was the ninth straight day of above 100,000 cases. According to Johns Hopkins University, about 10.4 million Americans have been infected by the coronavirus so far, and nearly 242,000 have died from it. These concerns raised the safe-haven appeal and supported the Japanese Yen that ultimately weighed on the USD/JPY.

On the data front, at 04:50 GMT, the Core Machinery Orders from Japan for September came in as -4.4% against the expected -1.1% and weighed on the Japanese Yen. The Purchasing Price Index (PPI) from Japan remained flat with the expectations of -2.1% for the year. At 09:30 GMT, the Tertiary Industry Activity for September raised to 1.8% against the anticipated 1.3% and supported the Japanese Yen and weighed on the USD/JPY pair.

The Federal Reserve Chairman Jerome Powell cautioned that the U.S. economy would further need support from Congress and the central bank even if a coronavirus vaccine becomes available by the end of the year. He said that despite the vaccine’s availability, there still will be millions of people left who have lost their job to the pandemic, and they will still struggle to find work as the economy will attempt to recover from the economic downturn.

He added that in the Federal Reserve’s eyes, the terrible rise in COVID-19 cases across the country was the “main risk” for the U.S. economy. He added that the coronavirus’s third wave had forced several states to re-impose lockdown restrictions and caused people to lose confidence. He stressed that the economy would not fully recover until people are confident that it was safe to resume activities involving the crowd. These comments from Powell also weighed on the U.S. dollar and added in the losses of the USD/JPY pair on Thursday.

Daily Technical Levels

Support   Resistance

103.82       106.29

102.27       107.21

101.35       108.75

Pivot point: 104.74

USD/JPY – Trading Tips

The USD/JPY is with a bearish bias at the 104.400 level, falling from the 104.850 support area. On the lower side, the USD/JPY pair is likely to find support at the 104.141 level, and violation of this level can also extend further selling boas until 103.500. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.845 and may help us capture a selling trades below this level as the MACD and RSI are supporting the selling trend today. Good luck! 

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 16 – Bitcoin to be Censored? Blockseer Mining Pool Enters the Game

The cryptocurrency sector has spent the weekend pretty flat as Bitcoin was experiencing a period of low volatility. The largest cryptocurrency by market cap is currently trading for $16,272, representing an increase of 1.37% on the day. Meanwhile, Ethereum lost 1.19% on the day, while XRP lost 0.69%.

The cryptocurrency sector has spent the weekend pretty flat as Bitcoin was experiencing a period of low volatility. The largest cryptocurrency by market cap is currently trading for $16,272, representing an increase of 1.37% on the day. Meanwhile, Ethereum lost 1.19% on the day, while XRP lost 0.69%.

The cryptocurrency sector has spent the weekend pretty flat as Bitcoin was experiencing a period of low volatility. The largest cryptocurrency by market cap is currently trading for $16,272, representing an increase of 1.37% on the day. Meanwhile, Ethereum lost 1.19% on the day, while XRP lost 0.69%.

 Daily Crypto Sector Heat Map

SushiSwap gained 13.81% in the past 24 hours, making it the most prominent daily gainer out of the top100 cryptos ranked by market capitalization yet again today. It is closely followed by THORChain’s gain of 9.54% and Curve DAO Token’s 4.80% gain. On the other hand, ABBC Coin lost 45.16%, making it the most prominent daily loser. The Midas Touch Gold lost 8.96% while Ampleforth lost 8.88%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has decreased slightly over the weekend, with its value is currently staying at 65%. This value represents a 0.3% difference to the downside compared to the value it had on Friday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone up very slightly over the course of the weekend. Its current value is $463.37 billion, representing an $0.51 billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

Blockseer, a US-based DMG Blockchain Solutions’ subsidiary, has recently announced a private beta version of a brand new Bitcoin mining pool. This particular mining pool is, however, quite unique and different. The Blockseer Mining Pool will, unlike any other mining pool, censor transactions from wallets that are blacklisted. They also plan on mandating the miners to undergo KYC procedure, according to marketing materials.

Any new blocks generated by the Blockseer pool will include only filtered transactions, and the filters will be based on the Walletscore’s data.

While some agree that this way of transacting might be the future, the vast majority of public figures say that this is pure censorship and that it goes against the basic principles of Bitcoin as a free cryptocurrency, where a transaction is a transaction, no matter where it comes from.

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has spent the weekend experiencing very low volatility while fighting an incredibly important battle. Bitcoin was fighting to stay above the $16,000 mark after the move to the upside has died down at $16,500 on Nov 13, thus triggering a pullback.

An interesting outlook on Bitcoin is that the now won fight for $16,000 has created a higher low, and Bitcoin might push even higher in the following days. Traders should pay attention to volume increases around the $16,400-$16,500 mark.

BTC/USD 4-hour Chart

Bitcoin’s technicals are tilted slightly to the buy-side on the 4-hour, daily and weekly time-frames. However, all of these time-frames show signs of neutrality. On the other hand, its monthly overview is completely bullish.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is above its 50-period EMA and at its 21-period EMA
  • Price is near its middle Bollinger band
  • RSI is neutral (58.99)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $16,500                                 1: $16,000

2: $16,700                                 2: $15,480

3: $17,000                                  3: $14,640

Ethereum

Ethereum has, just like Bitcoin, spent the weekend fighting to stay above its support level. The second-largest cryptocurrency by market cap, however, did not manage to win its fight. Ether has triggered a pullback after bouncing from the $478 level, which caused its price to first hover around the yellow top ascending channel line until it finally broke it to the downside. The move was stopped at $440, and Ethereum has since recovered and is currently trading just below the yellow line.

Our call on Friday for Ethereum dropping below the line was correct, as ETH did exactly as expected. However, the combination of factors at the moment make Ethereum a not-so-good trade, and traders should perhaps look at other options before choosing to trade it.

ETH/USD 4-hour Chart

Ethereum’s technicals are extremely bullish on its weekly and monthly time-frames and very bullish (but not as much as the aforementioned time-frames) on its daily overview. Its 4-hour overview, however, is tilted heavily towards the sell-side.

ETH/USD 1-day Technicals

Technical Factors (4-hour Chart):
  • The price is slightly above its 50-period and slightly below its 21-period EMA
  • Price is slightly below its middle Bollinger band
  • RSI is neutral (47.32)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $470                                     1: $451

2: $490                                     2: $445 

3: $500                                      3: $420

Ripple

The fourth-largest cryptocurrency by market cap had an incredible day on Friday, as its price pushed above 2 of its major resistance levels. XRP has managed to, in a span of around 12 hours, push past the $0.26 and $0.266 levels and took the weekend to consolidate above them and create a strong foundation. The $0.266 level was tested as support twice already, successfully both times.

Traders can finally look at XRP as a crypto that moves somewhere else than sideways, and look for opportunities in places other than the range between $0.2454 and $0.26.

XRP/USD 4-hour Chart

XRP’s technicals are slightly tilted towards the buy-side on all time-frames, with more or less neutrality signs. The important change from the last report (and many reports before) is XRP’s monthly overview, which has finally turned bullish.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price is above its 50-period EMA and slightly above at its 21-period EMA
  • Price is between its middle and top Bollinger band
  • RSI is neutral (59.63)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $0.27                                     1: $0.266

2: $0.2855                                 2: $0.26

3: $0.31                                    3: $0.2454

 

Categories
Forex Elliott Wave Forex Market Analysis

Is the EURJPY Ready to Develop a New Decline?

The EURJPY cross advances in a long-term consolidation structure, which began in early December 2016. The short-term Elliott wave view predicts a limited decline in the following trading sessions.

The EURJPY cross advances in a long-term consolidation structure, which began in early December 2016. The short-term Elliott wave view predicts a limited decline in the following trading sessions.

The EURJPY cross advances in a long-term consolidation structure, which began in early December 2016. The short-term Elliott wave view predicts a limited decline in the following trading sessions.

Market Sentiment

The EURJPY cross closed the last trading week, cutting Monday’s session gains when the cross jumped from 122.835 until 125.136, mainly supported by the stock market’s post-election rally.

The following figure shows the EURJPY in its daily timeframe, revealing the mid-term big-market participants’ sentiment exposed by the 90-day high and low range. In this context, the cross is entering into the bearish sentiment zone. However, the 60-day weighted moving average still doesn’t confirm the short-term bearish bias.

After a rally that carried the cross to advance over 11% since May 07th (when the EURJPY bottomed on 114.397 and then soared, reaching the highest level of the year at 127.075 on September 01st), the cross began to retrace, turning its mid-term market sentiment from extremely bullish to bearish.

Nevertheless, the price action still doesn’t confirm the bearish sentiment. In this regard, the short-term sentiment remains neutral until the price confirms the bias.

Technical Overview

The big picture of EURJPY illustrated in the following daily chart exposes a long-tailed yearly candlestick mostly bullish. However, the upper shadow hints at a bearish pressure near the psychological barrier of 127. Moreover, the next resistance is placed at 127.502, which corresponds to the high of 2019.

The EUJPY long-term trend under the Dow Theory perspective and exposed in the next log scale weekly chart reveals the primary trend identified in blue that remains slightly bullish.

At the same time, the secondary trend exposes the sideways movement developing as a pennant pattern, which began in early December 2016 when the price found resistance at 149.787 and could break soon.

According to the classic chartist theory, the pennant pattern is a technical figure that calls for the continuation of the previous movement. In this case, the pennant could resume the rally developed since late July 2012 at 94.114 ended at 149.787 in early December 2014.

Short-term Technical Outlook

The short-term Elliott wave view for EURJPY shows in its 12-hour chart advancing in an incomplete corrective sequence that began on May 06th at 114.397, where it completed its wave A of Minor degree labeled in green.

Once the price found fresh sellers at the highest level of the year, the cross started to advance in its wave B, still in progress. In this context, the previous chart unveils the intraday upward sequence corresponding to the incomplete wave ((b)) of Minute degree identified in black.

The price action could boost the cross until the next supply zone, located between 125.285 and 126.123, where the EURJPY could start to decline in an internal five-wave sequence corresponding to wave ((c)), in black, that may drop to 120.271, though, the price could extend its drops until 117.124.

The short-term bearish scenario’s invalidation level locates above the end of wave A in green at 127.075.

Categories
Forex Fundamental Analysis

The Impact Of ‘Machinery Orders’ Fundamental Indicator News Release On The Forex Market

Introduction

Introduction

Introduction

Industrial and manufacturing productions are one of the pillars of any economy. Whenever policies are implemented, governments tend to focus on ways to improve or increase production in the country. The main significance of manufacturing and industrial production is that they create employment opportunities in the local economy and ensure value addition to domestic products, making them competitive in the international markets. Furthermore, they contribute majorly towards technological advancements, which is why data on machinery orders is vital.

Understanding Machinery Orders

As an economic indicator, machinery orders measures the change in the total value of new orders placed with machine manufacturers, excluding ships and utilities.

The data on machinery orders are categorized into orders by; the private sector, the manufacturing sector, governments, overseas orders, and orders made through agencies. All these orders exclude volatile orders from power companies and those of ships.

Source: Cabinet Office, Government of Japan

The machinery orders by electric companies and that of ships are considered too volatile. This volatility is thanks to the fact that ships and the machinery used by electric companies are extremely expensive. Furthermore, these orders usually are placed once over long periods. Therefore, including these orders might unfairly distort the value of the machinery orders data.

To get a clear picture of what machinery, in this case, means, here are some of the components that are included in the machinery orders data. They are metal cutting machines, rolling machines, boilers, power units, electronic and communication equipment, motor vehicles, and aircraft.

Machinery orders from the government are categorized into; transport, communication, ministry of defence, and national and local government orders.

In the industrial sector, machinery orders are categorized by the manufacturing and nonmanufacturing sectors. The nonmanufacturing orders include agriculture, forestry, fishing, construction, electric supply, real estate, finance and insurance, and transportation. Some of the categories of orders in the manufacturing sector include; food and beverages, textile, chemical and chemical production, electrical and telecommunication machinery, and shipbuilding.

Using Machinery Orders for Analysis

By now, you already understand that machinery orders data encompass every aspect of the economy. It ranges from domestic government orders, agriculture, manufacturing and production, services delivery, and even foreign orders. As a result, the monthly machinery orders data can offer a treasure of information not only about the domestic economy but also foreign economies as well.

Source: Cabinet Office, Government of Japan

When companies invest in new machinery, it is considered a capital investment. Capital expenditure is usually considered whenever there is an anticipation of increased demands and services provided by the company. In this case, companies must scale up their operations to increase supply to match the increased demand. In the general economy, an increase in aggregate demand can result from increased money supply in the economy. Thus, it can be taken as a sign that unemployment levels in the economy have reduced or that households are receiving higher wages. Both of these factors can be attributed to an expanding economy.

Note that machinery, in this case, means heavy-duty machinery. Typically, these types of machinery take long in the production and assembly lines. At times, orders have to be placed weeks or months in advance. Therefore, the machinery delivered now may have possibly taken months in the assembly line. When the machinery orders increase, we can deduce that these machinery producers and assembly plants have to employ more labor.

Consequently, an increase in machinery orders means that unemployment levels will reduce. In turn, households’ welfare will improve, and aggregate demand for consumer products will rise. In the end, discretionary consumer industries will also flourish. A decrease in the machinery orders will tend to have the opposite effect.

Suffice to say, the machinery in question here are not cheap. Most companies finance their capital expenditure using lines of credit. Therefore, an increase in machinery orders could imply the availability of cheap credit in the economy. Access to cheap financing by companies and households stimulates the economy by increasing consumption and investments. As a result, the increased aggregate demand leads to an increase in the GDP and expansion of the economy.

Machinery orders data can also be used as an indicator of the economic cycles and to predict upcoming recessions and economic recoveries. When firms anticipate that the economy will go through a rough patch and demand will fall, they cut back on production. Scaling down operations means that they won’t be ordering any more machinery to be used in the production. Conversely, when companies are optimistic that the economy will rebound from recession or a depression, they will order more machinery to scale up their production in anticipation of the increased demand. Furthermore, when the economy is going through an expansion, the aggregate demand tends to increase rapidly. This rapid increase forces companies to increase their machinery orders to enable them to keep up with the demand.

Impact on Currency

The machinery orders data is vital in showing the current and anticipated state of the economy. For the domestic currency, this information is crucial.

The currency will appreciate when the machinery orders increase. Machinery orders are seen as a leading indicator of industrial and manufacturing production. Therefore, when the orders increase, the economy can anticipate an increase in industrial production. And along with it, a decrease in the level of unemployment. Generally, the increase in machinery orders means that the economy is expanding.

Conversely, when machinery orders are on a continuous decline, it means that businesses expect a more challenging operating environment. They will scale down their operations in anticipation of a decline in the demand for their goods and services. In this scenario, higher levels of unemployment should be expected in the economy. Since the economy is contracting, the domestic currency can be expected to depreciate relative to others.

Sources of Data

In this analysis, we will focus on Japan since one of the world’s leading producers of heavy machinery. The Cabinet Office, Government of Japan, releases the monthly machinery orders data in Japan. Trading Economics publishes in-depth and historical data of the Japanese machinery orders.

How Machinery Orders Data Release Affects The Forex Price Charts

The Cabinet Office, Government of Japan, published the latest machinery orders data on October 12, 2020, at 8.50 AM JST. The release can be accessed at Investing.com. The release of this data is expected to have a low impact on the JPY.

In August 2020, the monthly core machinery orders in Japan increased by 0.2% compared to the 6.3% increase in July 2020. During the same period, the YoY core machinery orders were -15.2% compared to -16.2% in the previous reading. Both the MoM and YoY data were better than analysts’ expectations.

Let’s see how this release impacted the AUD/JPY forex charts.

AUD/JPY: Before the Machinery Orders Data Release on October 12, 2020, 
just before 8.50 AM JST

Before the release of Japan’s machinery orders data, the AUD/JPY pair was trading in a steady downtrend. The 20-period MA was falling with candles forming below it. Fifteen minutes before the news release, the pair formed three bullish 5-minute candles showing that the JPY was weakening against the AUD.

AUD/JPY: After the Machinery Orders Data Release on October 12, 2020, 
at 8.50 AM JST

As expected, the pair AUD/JPY pair formed a long 5-minute bearish candle. Subsequently, the pair traded in a renewed downtrend as the 20-period MA steeply fell with candles forming further below it.

Bottom Line

Although the machinery orders data is a low-impact economic indicator, its release had a significant impact on the forex price action. This is because better than expected data shows that the Japanese economy might be bouncing back from the coronavirus-induced recession.

Categories
Forex Assets

AUD/TWD – What Should You Know Before Trading This Exotic Pair

Introduction

Introduction

Introduction

The AUD/TWD is an exotic currency pair with the AUD representing the Australian Dollar, and the TWD is the Taiwan Dollar. Such exotic pairs experience high volatility in the forex market. In this pair, the AUD is the base currency, while the TWD is the quote currency. That means that the exchange rate of the AUD/TWD is the amount of TWD that can be bought by 1 AUD. If the exchange rate of the AUD/TWD pair is 20.091, it means that you can exchange 20.091 TWD for 1 AUD.

AUD/TWD Specification

Spread

The spread in forex trading represents the difference between the price at which you can buy a currency pair when going long and the price at which you can sell the pair when going short. The spread for the AUD/TWD pair is – ECN: 24 pips | STP: 29 pips

Fees

Holders of ECN type accounts are typically charged a fee for every position they open. This fee depends on the size of the positions and the broker. Traders with STP accounts usually don’t get charged trading fees.

Slippage

If your broker delays executing your trade or if the market is highly volatile, you will notice a difference between the price you placed on your order and the execution price. This difference is slippage.

Trading Range in the AUD/TWD Pair

When trading forex, you will notice that a currency pair fluctuates over time. The trading range shows the minimum, average, and maximum variation in pips over different timeframes. By analysis of the trading range, we can determine the potential profit from trading a particular pair across various timeframes.

The Procedure to assess Pip Ranges

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

AUD/TWD Cost as a Percentage of the Trading Range

To establish the Percentage of the trading range for CAD/TWD, we will express the total trading costs for both ECN and STP accounts as a percentage of the trading range above. This analysis will show us the true costs of trading the AUD/TWD pair across different timeframes, which will aid in determining the best timeframe to trade.

ECN Model Account costs

Spread = 24 | Slippage = 2 | Trading fee = 1 | Total cost = 27

STP Model Account

Spread = 29 | Slippage = 2 | Trading fee = 0 | Total cost = 31

The Ideal Timeframe to Trade  AUD/TWD Pair

From this analysis, we can tell that as the timeframe becomes longer, the trading costs become lower. For both accounts, the highest trading costs are at the 1H timeframe, which coincides with the lowest volatility of 2.7 pips. The lowest trading costs are at the 1-month timeframe coinciding with when volatility is highest at 256.8 pips.

Overall, we can also notice that the trading costs reduce when volatility changes from minimum to maximum across all timeframes. Therefore, traders of the AUD/TWD pair can reduce their trading costs by trading longer timeframes or trading when volatility approaches maximum. Furthermore, using forex limit order types can remove slippage costs.

Here’s an example.

ECN Account Using Limit Model Account

Total cost = Slippage + Spread + Trading fee

= 0 + 24 + 1 = 25

When the slippage costs are eliminated, the trading costs for the AUD/TWD pair drop. In this case, the highest cost dropped from 457.63% to 423.73%.

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Forex Videos

USDCHF Sinks To Multi Year Lows Below 0.9000! What Should Be Your Next Move?

https://youtu.be/wxoxot8rkZA

https://youtu.be/wxoxot8rkZA

USDCHF sinks to multi-year lows below 0.9000. Where next?

Thank you for joining this forex academy educational video.

In this session, we will be looking at the USDCHF pair, which sank to a fresh low on Friday 6th November.

On this one-hour chart of the pair, we can see that on the 2nd of November, it had rallied to a high of 0.9207, before moving lower and where the market became extremely volatile on the 4th of November, but where the pair failed to re-establish itself at the previous high of just two days earlier. The size of the bars which have been highlighted can only mean that extra volume and volatility had crept in, and all of these moves can be associated with the lead up to and just after the US presidential election.
On Friday the 6th of November, the pair had moved over 200 pips lower to find support at 0.8982, a multi-year low, before recovering to the key 0.900 level.

In fact, we would need to go back to April 2014, which was the last time the pair had been so low. And much of this can be attributed to the strength of the Swiss franc, which is bought as a safe-haven asset by investors around the world who see value In the Swiss economy overall.
Although the chart is a monthly one, the huge swing in the price range of over 3000 pips in August 2014 worried institutional investors and traders, and that, ….

coupled with the Swiss National Bank’s abandonment of its cap on the Euro of 1.20 francs, which in January 2015 saw the EURCHF pair collapse to 0.8052 with some brokers, before recovering ground eventually to 1.04. Many traders were ruined by the unexpected move, and firms, including the Forex broker Alpari, went broke.
The Swiss National Bank has publicly stated on many occasions that it would defend the Swiss franc against strengthening with other currencies, especially the euro and the United States dollar because a strong Swiss franc means that exports become expensive and makes the country less competitive and that this is bad for the Swiss economy.
They either intervene to sell their currency or threatened to do so, and that coupled with the huge swings in price action which we have just shown you mean only one thing; traders are extremely cautious about trading the franc, which is prone to spikes, and shock moves caused by the Swiss National Bank intervening in the money markets.
That, however, has not stopped the Swiss franc being bought during this extremely volatile time, which has largely been brought about by the covid pandemic, where economies such as the United States and Europe have been badly affected, and of course, the current theme around the United States presidential election which has been the impetus for the push below 0.900 for the USDCHF pair.

This is certainly one pair to trade with tight stops and where the bias to the downside remains for the foreseeable future.

Categories
Crypto Market Analysis

BTC/USD Weekly Chart Overview + Possible Outcomes

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

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

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

Overview

Bitcoin has spent the week building an ascending channel that took its price from the $14,640 level all the way to $16,500. However, the new levels are mostly unexplored (apart from the late 2017 mini-bubble), and people that already invested in Bitcoin are either holding or taking profits, while new investors are wary of entering due to the price reaching this high. This left Bitcoin with a lot of people holding, a minority taking profit, and even a smaller minority wanting to buy it at $16,500 at the moment, which triggered a pullback. This doesn’t mean that $16,500 is an overestimate of Bitcoin’s worth, but rather that the economic uncertainty around the new US presidency, an unstable stock market as well as regulatory bodies honing in on crypto are all factors in the current minor pullback.

Our previous weekly analysis has predicted the price increase to $16,500 as well as the pullback. This doesn’t mean that the bull season has ended or that bears have taken over for good, but rather that BTC entered a healthy correction phase before establishing a new price target.

Technical factors



Bitcoin has continued moving along the ascending channel started on Nov 7 and gaining in value up until the $16,500 resistance level that we called out. This level has triggered a pullback as BTC could not pass the zone of resistance. While the pullback was mostly sideways and slow, a confirmation of a real pullback happening occurred on Nov 14, when Bitcoin dropped out of the ascending channel as well as below the $16,000 psychological level.

While Bitcoin’s sentiment is extremely bullish overall, its short-term overview points to a pullback that will most likely end at the zone of support near the $15,480 level.

The hash ribbons indicator is still showing miner capitulation (ever since Oct 29), sending out a major buy signal.

Likely Outcomes

Bitcoin has one main scenario that is most likely to play out, which is its price continuing down towards the $15,480 area where it will encounter strong support, which will most likely stop it from going further down. If this happens and Bitcoin does bounce off of the $15,480 area, we may expect another push towards the recently-made highs. In this case, traders should have a clear path towards $16,500 again, and they should pay attention to BTC, possibly making a double top at its most recent high rather than surpassing the level.

A move that will end up below $15,480 is highly unlikely, simply due to the overall sentiment currently surrounding Bitcoin. However, as unlikely as it is, anything is possible, and Bitcoin might fall below the support level. In that case, traders can expect a sharp price decrease and a possible push towards the $14,640.

Categories
Forex Elliott Wave Forex Market Analysis

Is GBPUSD Ready for a New Decline?

Overview

Overview

Overview

The GBPUSD pair advances in an incomplete bearish corrective formation that corresponds to a wave B of Minor degree. In this context, the completion of wave B could lead to a new decline, which could drag the price below Septembers’ low.

Market Sentiment

The GBPUSD pair suffered another drop for the second day in a row, falling from the extreme bullish to a bullish sentiment zone, where it found support in the psychological barrier of level 1.31.

The following daily chart illustrates the 90-day high and low range, revealing the mid-term market participant’s sentiment. The figure shows the price action moving mostly sideways in a range that oscillates between the bearish and bullish sentiment zones; that is, between 1.27204 and 1.32289.

Furthermore, the 60-day weighted moving average is seen moving below the Pound’s price, which confirms the short-term bullish bias that carries the price.

Considering the indecision, the cable is exhibiting since last August. The intraday bias will stay neutral until the GBPUSD pair confirms its next movement, for example, through a breakout.

Technical Overview

The GBPUSD price reveals a yearly long-tailed candlestick that suggests the price will continue being dominated by the upward bias. As exposed in the following 2-day chart, the Pound erased the first 2020 quarter losses that reached up to 13.89%. The cable currently eases 0.67%(YTD).

The big picture of GBPUSD and under the Dow Theory unfolded in the next daily chart illustrates the cable developing a primary upward trend in progress, which currently could be forming a corrective secondary trend.

In this context, according to Dow Theory, the price retraced below 33% of the first upward movement, which accomplishes with the minimum requirement for a correction of the previous move of a similar level.

Nevertheless, considering that the price remains in a short-term downward trend, the price could continue developing a new bearish sequence.

Short-term Technical Outlook

The short-term Elliott wave outlook for GBPUSD unfolded in its 8-hour chart reveals the corrective rally that corresponds to an incomplete wave B of Minor degree identified in green, which leads us to expect a decline in a five-wave sequence for the following trading sessions.

 

The previous chart exposes a corrective structural series that began on September 01st when the price found fresh sellers at 1.34832 and dragged the cable until 1.26751 on September 23rd, where the pound started to advance in its wave B that remains in progress. 

In this regard, the current upward movement could find resistance in the first supply zone between 1.32069 and 1.32280. If the price extends its previous progression, creating a bull trap, it could climb until 1.33195. There, the price could start to decline in a five-wave sequence corresponding to wave C identified in green.

The potential next wave C could extend until the demand zone between 1.25658 and 1.24796, which corresponds with the mid-term descending channel’s base.

Finally, the bearish scenario’s invalidation level locates at 1.34832, which agrees with the origin of wave A in green. Nevertheless, before positioning on the downward side, the GBPUSD pair should confirm (or discard) the bearish entry. 

 

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Forex Course

173. How To Trade Using Three Different Trading Timeframes?

Introduction

Introduction

Introduction

Our previous lesson covered how to use multiple timeframe analysis to find better entry and exit points. Timeframes in forex trading can be categorised into three: long timeframe, intermediate timeframe, and short timeframe. This lesson will illustrate how you can trade with three timeframes depending on the type of forex trader you are.

Depending on your forex trading style, the long timeframe is used to determine the prevailing market trend; the intermediate timeframe used to show the consistency of the observed trend, while the short timeframe used to determine the best entry and exit points for a trade.

Long Timeframes in Forex

The long timeframes are used to establish the prevailing primary trend of a currency pair. Depending on the trading style, the long timeframes in forex ranges from a 30-minute timeframe to a 1-month timeframe.

Day trader long timeframe: 1-hour GBP/USD chart

For a forex day trader, a 1-hour timeframe shows the prevailing and dominant downtrend in the GBP/USD pair. Using this timeframe, you can establish support and resistance levels.

Intermediate timeframes in Forex

These timeframes are used to establish the current market trend. The intermediate timeframe in forex helps you to determine the magnitude of the trend observed with the long timeframe. It is expected to see more price fluctuations when using this timeframe, but the general trend should align with the long timeframe.

Day trader intermediate timeframe: 30-minute GBP/USD chart

As can be seen, the price pullbacks are more visible using the intermediate timeframe. The price fluctuations are more pronounced as you can see how the primary trend observed with the long timeframe is broken down.

Shorter timeframes in Forex

Depending on your forex trading style, the shorter timeframes show the most current and shorter changes in the price movements.

The shorter timeframes are used to determine the best entry and exit points of a trade. With shorter timeframes, you can quickly establish whether the price has reached the support and resistance levels.

Day trader shorter timeframe: 15-minute GBP/USD chart

Using the 15-minute timeframe, the day trader can quickly establish the entry positions for shorting the EUR/USD when the price bounces from the resistance levels.

Trading three timeframes helps you establish the dominant trend, narrow this trend down while determining its magnitude, and finally establish the best entry and exit points.

[wp_quiz id=”89198″]
Categories
Forex Videos

Forex Forecast – EURUSD Approaching Resistance – Buyers Beware!

https://youtu.be/sFr3Oj_ly5E

https://youtu.be/sFr3Oj_ly5E

 

EURUSD approaching resistance – buyers beware!

 

Thank you for joining this forex academy educational video.
In this session, we will be looking at the EURUSD pair, which has found a recent bid tone at the time of writing and is approaching a significant area of resistance.

In this monthly chart, we can see the overall declining price action, which has been conforming to the trendlines from December 2007, where price reached a heady high of over 1.600 against the US Dollar, to a low in January 2017 of 1.0350. That’s quite a fall.

The continuation with the rejection of the declining resistance line and a failure at position A of price action to continue down to the support line gave rise to a lack of institutional sized sellers and a shallower support line forming around position B until price action reverted to the resistance line, where it eventually breached it at position C. This shows that institutional size traders were finding the Euro attractive than the US dollar at around the time of the Covid pandemic seriously affecting the United States economy, while the Europeans got to grips with the pandemic in terms of financial relief packages for EU citizens and businesses.
The big test for institutional size traders is whether or not this is just a breach and that price action will move back inside the channel to retest the shallower support line at position B or if there is a sustained move higher, which will be a failing of the monthly trend.

In this chart, we have reduced the monthly candlesticks to a daily chart to try and identify the section of price action which has been going on since the monthly resistant line was breached in order to try and ascertain where the levels are where we might find further resistance and which might cause price action to revert back into to the monthly channel or to try and identify if the price action will continue outside of that trend and form a new bid trend.

In this chart of the daily time frame, we have identified a clear area of resistance at around 1.1950, followed by a period of support at around 1.1717, which eventually is breached to just above 1.1600, only for price action to find support here and move higher.
Price action has currently reached a double top formation, and with the original area of resistance only around 50 pips above it, the next test will be to see if the price action will continue up to the resistance line, then move above it, fall back to it and where that then becomes an area of support – such as our hypothetical arrows – and that price action will conform a continuation to the upside and the end of the monthly bear channel.

Conversely, should price action move back below the support line, and then back up to it, and fall lower and where they support line becomes an area of resistance, again – such as our hypothetical arrows – this will tell institutional traders that the breach of the monthly trend may see price action fall back in line with the bear trend.

New traders are advised to look at the longer-term trading picture, such as the daily and monthly charts because this is where the swing traders look for trading ideas, and this includes institutional size investors, and these types of traders have big money to play with, which will have a major impact on price direction in the forex market.

Categories
Forex Signals

EURAUD Reversal Breakout on Top of Regression Channel

The EURAUD cross has experienced a strong upward movement that brought its value beyond the top of a descending regression channel.  After topping the upper line, which, as we know, is 2 sigmas above the mean line, the price has made a consolidation on the line, making a series of lower highs.

The EURAUD cross has experienced a strong upward movement that brought its value beyond the top of a descending regression channel.  After topping the upper line, which, as we know, is 2 sigmas above the mean line, the price has made a consolidation on the line, making a series of lower highs.

The EURAUD cross has experienced a strong upward movement that brought its value beyond the top of a descending regression channel.  After topping the upper line, which, as we know, is 2 sigmas above the mean line, the price has made a consolidation on the line, making a series of lower highs.

Currently, the current 1H bar is making an engulfing pattern and managing to break the recent lows, which acted as supports for the action.

If that happens, the pair may experience a corrective run to the mid of the channel. This setup has a 2.28 reward-to-risk ratio, therefore, suitable for a controlled trade on the short side, using a sell-stop order that triggers below the recent lows.

Trade Setup:

Entry: Sell-Stop at 1.6295

Stop-Loss: 1.6345

Take-Profit:1.6185

Risk and Reward

This trade setup has a risk of 52 pips and a 118 pip reward. Then, the dollar risk is 377 USD on one lot, 37.7 USD on a mini-lot, and 3.77 USD on a micro-lot. The reward is 855 USD on a lot, 85.5 USD on a mini-lot, and 8.55 USD on a micro-lot.

Categories
Crypto Market Analysis

Daily Crypto Review, Nov 13 – Bitcoin Above $16,000: What’s Next?

The cryptocurrency sector has spent the day equally divided between cryptos that ended up in the red and the green. The largest cryptocurrency by market cap pushed past its $16,000 mark and is currently trading for $16,291, representing an increase of 3.26% on the day. Meanwhile, Ethereum lost 0.15% on the day, while XRP gained 0.45%.

The cryptocurrency sector has spent the day equally divided between cryptos that ended up in the red and the green. The largest cryptocurrency by market cap pushed past its $16,000 mark and is currently trading for $16,291, representing an increase of 3.26% on the day. Meanwhile, Ethereum lost 0.15% on the day, while XRP gained 0.45%.

The cryptocurrency sector has spent the day equally divided between cryptos that ended up in the red and the green. The largest cryptocurrency by market cap pushed past its $16,000 mark and is currently trading for $16,291, representing an increase of 3.26% on the day. Meanwhile, Ethereum lost 0.15% on the day, while XRP gained 0.45%.

 Daily Crypto Sector Heat Map

Blockstack gained 33.78% in the past 24 hours, making it the most prominent daily gainer out of the top100 cryptos ranked by market capitalization yet again today. It is closely followed by Dash’s gain of 13.33% and Decred’s 8.98% gain. On the other hand, ABBC Coin lost 12.08%, making it the most prominent daily loser. Ampleforth lost 11.75% while Aragon lost 10.85%, making them the 2nd and 3rd most prominent daily losers.

Top 10 24-hour Performers (Click to enlarge)

Bottom 10 24-hour Performers (Click to enlarge)

Bitcoin’s market dominance has increased since we last reported, with its value is currently staying at 65.3%. This value represents a 0.8% difference to the upside compared to the value it had yesterday.

Daily Crypto Market Cap Chart

The crypto sector capitalization has gone up over the course of the day. Its current value is $462.86 billion, representing an $8.70 billion increase compared to our previous report.

_______________________________________________________________________

What happened in the past 24 hours?

_______________________________________________________________________

_______________________________________________________________________

Technical analysis

_______________________________________________________________________

Bitcoin

The largest cryptocurrency by market capitalization has tested the $16,000 mark for a long time, failing a couple of times as profit-taking chipped away too much bull power. However, BTC has officially broken the $16,000 resistance today, turning it into support. The move that pushed it past this mark has ended right at the $16,500 resistance, which held up quite well. Many say the reason for the move past $16,000 is that banks and firms are moving their funds into BTC due to uncertainties in the traditional markets (major indexes traded slightly in the red yesterday). An engulfing candle that followed the last green candle of the move, as well as RSI bouncing off of the overbought area, show that a correction is the most likely option at the moment.

Slow and steady increases in volume accompanied each of Bitcoin’s moves. Traders can use this info to enter and exit trades safely.

BTC/USD 4-hour Chart

Bitcoin’s technicals are bullish overall but are split between the 4-hour and weekly time-frames, which are more tilted towards the neutral position, and daily and monthly time-frames, which are completely bullish.

BTC/USD 1-day Technicals

Technical factors (4-hour Chart):
  • Price is well above its 50-period EMA and its 21-period EMA
  • Price is near its top Bollinger band
  • RSI is near the overbought territory (64.03)
  • Volume is slightly above average
Key levels to the upside          Key levels to the downside

1: $16,500                                 1: $16,000

2: $16,700                                 2: $15,480

3: $17,000                                  3: $14,640

Ethereum

Ethereum has continued its upward path, supported by its ascending channel top line. The second-largest cryptocurrency by market cap managed to hold itself above this level, effectively slowly increasing in price due to the slope of the support line. However, it is yet to be seen if ETH can stay above this level for long, and a potential drop below the line is quite possible.

Ethereum traders should look for ETH dropping below the top line of the ascending channel and trade off of that.

ETH/USD 4-hour Chart

Ethereum’s technicals are bullish on all time-frames, with its 4-hour time-frame being more tilted towards the neutral position and longer time-frames being completely bullish.

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 slightly above its middle Bollinger band
  • RSI is neutral (53.64)
  • Volume is average
Key levels to the upside          Key levels to the downside

1: $470                                     1: $451

2: $490                                     2: $445 

3: $500                                      3: $420

Ripple

The fourth-largest cryptocurrency by market cap has had a slow day of sideways action within the range it is in for almost a week. XRP has moved slightly towards the middle of the range after it failed to break the $0.26 resistance level, entering a period of low volatility.

Traders shouldn’t really be interested in XRP at the moment due to its low volatility. However, those that want to trade XRP can enter trades with targets and stop-losses that correspond to the current support/resistance levels.

XRP/USD 4-hour Chart

XRP’s technicals on the 4-hour and daily time-frame have changed its stance from bullish/neutral to straight bullish, while its weekly time-frame is still almost completely neutral. Its monthly overview shows strong bearish sentiment.

XRP/USD 1-day Technicals

Technical factors (4-hour Chart):
  • The price is above its 50-period EMA and at its 21-period EMA
  • Price is at its middle Bollinger band
  • RSI is neutral (50.34)
  • Volume is slightly below 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
Forex Market Analysis

Daily F.X. Analysis, November 13 – Top Trade Setups In Forex – CPI, Employment in Focus! 

The eyes will remain on the U.S. Core PPI m/m and the Prelim UoM Consumer Sentiment from the United States on the news side. Both of the events are expected to drive some movement in the U.S. dollar and related currency pairs. During the European session, the French Final CPI m/m, Flash Employment Change q/q, and Flash GDP q/q will remain in highlights as these are coming from European counties; therefore, we can expect support to the Euro pairs.

The eyes will remain on the U.S. Core PPI m/m and the Prelim UoM Consumer Sentiment from the United States on the news side. Both of the events are expected to drive some movement in the U.S. dollar and related currency pairs. During the European session, the French Final CPI m/m, Flash Employment Change q/q, and Flash GDP q/q will remain in highlights as these are coming from European counties; therefore, we can expect support to the Euro pairs.

The eyes will remain on the U.S. Core PPI m/m and the Prelim UoM Consumer Sentiment from the United States on the news side. Both of the events are expected to drive some movement in the U.S. dollar and related currency pairs. During the European session, the French Final CPI m/m, Flash Employment Change q/q, and Flash GDP q/q will remain in highlights as these are coming from European counties; therefore, we can expect support to the Euro pairs.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18054 after placing a high of 1.18230 and a low of 1.17584. The currency pair EUR/USD reversed its Wednesday’s movement and raised on Thursday despite coronavirus worsened Europe’s situation. Italy was now expecting to enter a nationwide lockdown due to the increased number of coronavirus cases and curb the virus’s spread that should have caused the EUR/USD pair to continue movement in the downward direction. Still, the pair surged on the back of the weak U.S. dollar.

The U.S. dollar has suffered from risk-on markets sentiment, with investors becoming more optimistic after Pfizer’s 90% effective coronavirus vaccine. The greenback was also weak due to the declining CPI data from the U.S. At 12:00 GMT, the German Final CPI for October came in line with the expectations of 0.1%. At 15:00 GMT, the Industrial Production in September from Eurozone declined to -0.4% against the forecasted 0.6% and weighed on Euro and capped further gains in EUR/USD pair.

At 18:30 GMT, the Consumer Price Index for October fell to 0.0% against the projected 0.1% and weighed on the U.S. dollar and supported the EUR/USD pair’s upward direction. The Core CPI for October also declined to 0.0% from the projected 0.2% and weighed on the U.S. dollar and added further in gains of EUR/USD pair. However, the Unemployment Claims from last week fell to 709K against the projected 730K and supported the U.S. dollar and capped further gains in currency pair EUR/USD pair.

Moreover, the U.S. political uncertainties also continued weighing on the U.S. dollar after the victory of Joe Biden and becoming 46th U.S. President. Donald Trump has failed to concede Biden’s victory and has left the markets uncertain about what could happen next as Trump attempts to challenge the vote. 

Meanwhile, the U.S. dollar was also under pressure because of the rising number of coronavirus infections on Wednesday. The cases increased to 142,000 new cases in a single day, and the hospitalization rate also increased and reached 65,000, the highest during the pandemic. These virus conditions in the U.S. also weighed on the U.S. dollar and supported the upward movement of the EUR/USD pair.

On the other hand, the ECB President Christine Lagarde said that she believes that the region’s monetary authority will move to launch a digital version of the Euro in the next two to four years. Previously, ECB officials disclosed that they were researching a central bank digital currency.

On the virus front, the ECB President, Christine Lagarde, said that the coronavirus vaccine had reduced the uncertainty and complete lockdown was not the best way to deal with the second wave. These comments from Lagarde also supported the upward movement of the EUR/USD pair on Thursday.

Daily Technical Levels

Support   Resistance

1.1738      1.1827

1.1697      1.1875

1.1648      1.1917

Pivot point: 1.1786

EUR/USD– Trading Tip

The EUR/USD continues to trade sideways at the 1.1804 area, facing immediate support at the 1.1749 level along with resistance at the 1.1835 level. On the further higher side, the violation of the 1.1835 level can extend the buying trend until 1.1907. On the lower side, the support level prevails at 1.1749 and 1.1680 level. The MACD and EMA are also neutral; therefore, we may see selling below the 1.1835 and bullish above the same level today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.31222 after a high of 1.32281 and a low of 1.31062. The pair GBP/USD continued following its previous day movement and extended its losses on Thursday. On Thursday, the Bank of England Governor said that he hoped a goodwill spirit would prevail between Britain and the European Union countries to smooth over unavoidable trade disruptions after the end of the Brexit transition period on Jan-1st.

Bailey also told a panel discussion with the U.S. Federal Reserve Chair Jerome Powell and European Central bank President Christine Lagarde that he felt very uncomfortable at the huge amount of economic uncertainty created by a coronavirus. On Thursday, Bailey said that he was encouraged by the latest coronavirus vaccine developments, which reduce economic uncertainty.

He also said that the trade talks were continuing between Britain and the European Union, but he could not judge the outcome. He said that he hoped that if there will be a trade agreement, there will be a goodwill spirit. However, he also told the panel Britain’sain’s financial sector was ready for the end of transition periods irrespective of a deal and was better prepared than the rest of the economic sectors. Bailey’s comments raised concerns in the market sentiment and kept the British Pound under pressure that left the GBP/USD pair on the downside.

On the data front, at 05:01 GMT, the RICS House Price Balance from the U.K. for October raised to 68% from the forecasted 54% and supported GBP. At 12:00 GMT, the Prelim GDP for the 3rd Quarter declined to 15.5% against the expected 15.8% and weighed on British Pound and added in the losses of GBP/USD pair. For September, the U.K.’s Construction Output raised to 2.9% against the forecasted 2.1% and supported British Pound. The GDP for September from the U.K. also declined to 1.1% against the estimated 1.5% and weighed on British Pound and further supported the GBP/USD pair’s losses.

The Goods Trade Balance came in as expected -9.3B. The Index of Services for the Quarter also declined to 14.2% from the forecasted 14.6% and weighed on British Pound and added losses in currency pair. The Industrial Production for September again fell to 0.5% from the estimated 0.9% and weighed on GBP. The Manufacturing Production in September from the U.K. dropped to 0.2% against the projected 0.7% and weighed on GBP. The Prelim Business Investment dropped to 8.8% in September from the projected 14.4% and weighed on local currency Sterling and further pushed the pair on the downside.

From the U.S. side, at 18:30 GMT, the Consumer Price Index for October was dropped to 0.0% against the expected 0.1% and weighed on the U.S. dollar and capped further losses in GBP/USD pair. The Core CPI for October also dropped to 0.0% from the expected 0.2% and weighed on the U.S. dollar. However, the Unemployment Claims from last week fell to 709K against the estimated 730K and supported the U.S. dollar and added losses in GBP/USD pair on Thursday.

Daily Technical Levels

Support   Resistance

1.3170      1.3291

1.3119      1.3361

1.3050      1.3412

Pivot point; 1.3240

GBP/USD– Trading Tip

The GBP/USD pair is trading at 1.3116 level, holding over 1.3110 level, which is extended by an upward trendline on a 2-hour timeframe. The Cable has recently completed 38.2% Fibonacci retracement, and now it’s holding above the double bottom support level of 1.3110 level. On the higher side, the pair may surge until the resistance level of 1.3190 level. The MACD and RSI support selling trend, but considering the trendline support and oversold indicators, it is worth giving a buy shot to GBP/USD pair. Let’s consider buying over 1.3110 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.121 after placing a high of 105.476 and a low of 105.068. The pair USD/JPY reversed its direction and started falling on Thursday amid the broad-based US dollar weakness. The decreased risk sentiment due to the escalated second wave of the coronavirus in the United States weighed on the USD/JPY pair on Thursday. The investors started to fear that governments might respond by imposing the lockdown restrictions that will slow down the economic recovery.

The United States reported about 140,453 cases on a single day on Wednesday, and it was the ninth straight day of above 100,000 cases. According to Johns Hopkins University, about 10.4 million Americans have been infected by the coronavirus so far, and nearly 242,000 have died from it. These concerns raised the safe-haven appeal and supported the Japanese Yen that ultimately weighed on the USD/JPY pair on Thursday.

On the data front, at 04:50 GMT, the Core Machinery Orders from Japan for September came in as -4.4% against the expected -1.1% and weighed on the Japanese Yen. The Purchasing Price Index (PPI) from Japan remained flat with the expectations of -2.1% for the year. At 09:30 GMT, the Tertiary Industry Activity for September raised to 1.8% against the anticipated 1.3% and supported the Japanese Yen and weighed on the USD/JPY pair.

From the US side, at 18:30 GMT, the Consumer Price Index for October was dropped to 0.0% against the anticipated 0.1% and weighed on the US dollar and dragged the pair USD/JPY on the downside. The Core CPI for October also dropped to 0.0% from the anticipated 0.2% and weighed on the US dollar and added further in the USD/JPY pair’s losses. However, the Unemployment Claims from last week were declined to 709K against the anticipated 730K and supported the US dollar that capped further losses in the USD/JPY pair.

Meanwhile, on Thursday, the Federal Reserve Chairman Jerome Powell cautioned that the US economy would further need support from Congress and the central bank even if a coronavirus vaccine becomes available by the end of the year. He said that despite the vaccine’s availability, there still will be millions of people left who have lost their job to the pandemic, and they will still struggle to find work as the economy will attempt to recover from the economic downturn.

He added that in the Federal Reserve’s eyes, the terrible rise in COVID-19 cases across the country was the “main risk” for the US economy. He added that the coronavirus’s third wave had forced several states to re-impose lockdown restrictions and caused people to lose confidence. He stressed that the economy would not fully recover until people are confident that it was safe to resume activities involving the crowd. These comments from Powell also weighed on the US dollar and added in the losses of the USD/JPY pair on Thursday.


Daily Technical Levels

Support   Resistance

103.82      106.29

102.27      107.21

101.35      108.75

Pivot point: 104.74

USD/JPY – Trading Tips

The USD/JPY is trading sideways between 105.650 – 104.900 level, and violation of this level can extend the selling trend until the next support level of 104.430 mark. Simultaneously, the bullish breakout of the 105.650 level may open further room for buying until the 106.142 level. Overall, the eyes will remain at 104.835 level to trade bearish below this level until 104.435 and 104.175 level today. Good luck!