Tag: underlying themes

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

https://youtu.be/XuDE2jKMbZc

https://youtu.be/XuDE2jKMbZc


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

Thank you for joining this Forex academy educational video.

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

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

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


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

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

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

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

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

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

Should such a conflict between China and America occur, what might we expect from the financial markets?  Mayhem, confusion, and extreme market volatility, stock indices around the globe would fall, but especially within the United States, and we might see the Japanese yen and Swiss franc being bought as safe-haven assets.

China seems determined to retake Taiwan, as much as Taiwan appears to want to break away officially.  The Chinese government would very likely not back down, and I’ll poke a finger in the west by provoking them into military exercises while flying over Taiwan’s airspace, which China sees as its own.

 

This is a crisis that he’s not going to go away anytime soon.  It will undoubtedly escalate.  Traders are advised to keep an eye on the escalating conflict because it will likely lead to spikes in many asset classes.

 

 

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Forex Daily Topic Forex for Beginners

How To Trade The Markets Now- Joe Biden The President Elect Is In Play!

https://youtu.be/R8be9WtTVcU

https://youtu.be/R8be9WtTVcU

Joe Biden President-Elect? How might the markets react long term?

Thank you for joining this forex academy educational video. In this video, we will be looking at the present, with Joe Biden of the democratic party as President-elect.

At the time of writing, Joe Biden would appear to have an unassailable lead in the US presidential elections. No doubt, President Trump will use every tool and trick at his disposal to try and hang on to power, including legal intervention in what he calls fraudulent voting, which, according to the press, is totally unfounded.
However, with votes still being counted in a handful of remaining states, and with Joe Biden well out in front, it would appear ear that he has one foot in the White House already.
What would this mean for the financial markets?
The Democrats, headed by Joe Biden, have lambasted Trump’s policies over the last 4 years. They will likely try and reverse many of the policies implemented by the Trump administration. One of the Democrats’ election pledges was to impose extra corporate regulation, taxes, and healthcare spending, all of which would be negative for the stock markets in the United States unless, of course, they are healthcare-related, or in the green sector, where Joe Biden has pledged to spend more money, to reduce greenhouse gases. Joe Biden has pledged to give the country a leading role in global efforts to curb climate change, a reversal in direction from the Trump administration where Donald Trump withdrew from the Paris climate agreement in 2017.
Another policy that has helped Joe Biden gain votes is his pledge to penalize companies, presumably by taxation, that moved jobs abroad. This will undoubtedly have been why the Midwest saw a surge in Democratic votes because it is the industrial heartland of America, the so-called Rust Belt.
In a twist, where investors might have bailed out of stocks due to a potential shift in policy under a new administration, with regard to higher taxes for corporations and more regulations, which would tie the hands of corporate companies and potentially affect their earnings capabilities, the markets have been airing on the side that a potential democratic party victory may be the quickest route to a generous government stimulus continuation package, and this of course, in the current economic uncertainties, would be a welcome thing.

In the lead up to the election, we can see here that the US dollar index, which is a measure of the dollar value against the basket of major currencies, the price has fluctuated between 92.00 and 94.00 since mid-August, with pressure currently to the downside at the time of writing.

One of the biggest gainers against the Dollar has been the Swiss franc, where the USDCHF pair fell below the 0.900 level on Friday 6th November as the franc was being bought as a safe-haven asset. The last time the pair hit this level was in 2014.

Another asset that is bought in times of uncertainty is the Japanese yen. Here we can see that also on the 6th of November, the USDJPY currency pair fell below the key 104.00 level to reach 103.37, and analysts will be looking to the low in March of this year where the pair fell below the 102.00 level and possibly a test of the 101.00 exchange rate.

And while the euro and pound have also made gains against the United States dollar, the Dow Jones 30 industrial index has flattened just above 28,000, as buyers try to figure out the actual winner of the presidential election, which as mentioned looks very much like Joe Biden, and what the democratic policies are likely to do for the American economy as previously stated.
Extreme volatility has prevailed over the last few weeks, and that is likely to do so in the following days and weeks until whoever actually wins the next president of the United States.
Longer-term, the markets will be looking at Democratic policies if they officially win the election and be looking for them, will they, won’t they, covid stimulus package to be agreed upon by the Democrats and Republicans.

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Forex Market Analysis Forex Videos

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

https://youtu.be/MU6C9-G7SLc

https://youtu.be/MU6C9-G7SLc

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

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

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

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

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

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

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

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

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

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Forex Videos

The Forex Market reaction to Fed Powell speech & What It Means Going Forward!

https://youtu.be/Mw5D-46-g-Q

https://youtu.be/Mw5D-46-g-Q

Market reaction to Fed Powell speech 27 August 2020: The new framework

Thank you for joining this forex academy educational video. In this session, we will look at the extreme market volatility after federal reserve chairman Jerome Powell’s speech at Jackson Hole on the 27th of August.

The United States dollar has remained on the back foot this week with the DXY punching through 93.00. There was a lot of expectation for the US data on Thursday the 27th, especially the 2ND quarter gross domestic product, which came in slightly better than expected and also the initial jobless claims, which again was very slightly better than expected.

However, while that data had a fairly muted effect, keeping the euro US dollar pair just above point 1.1800. It was fed Powell’s speech on monetary policy, which really caused volatility in the marketplace, causing the pair to spike to a high of 1.1900 and a low 1.1759 while the market tried to digest the new policy and how it might affect the markets in general.
Whenever we get spikes and reversals after a policy shift from a major Western government, especially the USA, it is largely because analysts and economists are fairly split on whether or not the new policy will help or hinder the United States economy, and whether or not it is good or bad for investors.

The policy centers around the feds benchmark 2% inflation target and where it says it is now in a position for that to be over-shot to slightly above on occasions. This new policy, to tolerate inflation above 2%, is largely seen by the markets that the Fed will be holding interest rates lower for longer, possibly even years. This, of course, is not attractive for people who want to hold United States dollars. Although interest rates have been low for some time, to assist the United States economy rebound from the catastrophic effects of the coronavirus, the fact that we may see low interests rates in the United States for many years to come is not attractive to Dollar investors, and this is why we are seeing almost pandemonium in the currency markets. Most of this pertains to the US dollar.

So, what can we expect in the currency markets? Posted speech, the Asian session continued the US dollar sell-off, where great volatility has been seen in the market since Powell’s speech. The DXY index has been taking a major beating, and no end looks to be in sight. Therefore, we suggest traders’ limits risk by keeping stop losses tight and lowering leverage until market volatility decreases