Edge Forex

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  • Forex News January 24, 2022

    Forex News January 24, 2022

    #edgeforex #trading #market #money #forex #countries #dollar #currencies #trade #america #nasdaq #high #low #dollar #futures #crypto #bitcoin futures

    US futures 

    The S&P 500 futures are down 0.2 percent, the Nasdaq futures are down 0.3 percent, and the Dow futures are down 0.1 percent for the day. 

    That didn’t take long, since the risk-averse mood from last week persists. The charts for US stocks are now looking bad, which is a difficult one to overcome. The real concern today is that this correction will have to run many deeper legs before stabilising. One may argue that it was long overdue.

    Dollar 

    • The dollar continues its gains as risk sentiment begins to deteriorate. 
    • The dollar extends its lead over riskier currencies. 
    • The AUD/USD is currently down about 0.7 percent to 0.7135, closing in on the 7 January low of 0.7130. A break below there opens the way to some modest support at 0.7100, followed by a possibly sharper loss back to 0.7000. 
    • Elsewhere, the USD/CAD is regaining ground over 1.2600, as oil trades down for the day, with WTI currently trading below $85. Meanwhile, GBP/USD is closing in on 1.3500 after breaking over its 100-day moving average.
    • Once the figure level loses way, the slide in cable may accelerate into the 50.0 retracement level @ 1.3455.
    • NZD/USD falls to its lowest level since November 2020. 
    • The pair is presently trading below 0.6700, down 0.4 percent. 
    • Sellers are attempting to breach critical support at the 0.6700 level, which helped to halt the first drop in December. The 38.2 retracement level at 0.6702 adds to the support layer, but both look to be losing way today as the price falls to 0.6690. Of course, the daily/weekly close will still decide the alleged breakdown, but given the current risk mood, a comeback may be difficult to foresee. The next realistic objective on any dip from here would be 0.6500, followed by the 50.0 retracement level at 0.6467.
    • Those will be critical levels to monitor if we do see a break to the negative extend deeper in the sessions ahead. 
    • For the time being, it’s all about risk sentiment, and there has been a distinct trend of dip buyers failing to increase confidence since last week. That indicates a lot about the potential for this correction to continue, especially because the technicals confirm it.

    Bitcoin

    Bitcoin’s price has now dropped by more than half of its all-time high.

    Bitcoin is down more than 7% on the day to below $34,000 

    Bitcoin’s all-time high was $69,000 in November, and its value has dropped by more than half since then. The 7% decrease today extends the bearish trend that began with the $40,000 break last week. It’s not looking good, and as previously stated, essential support is closer to $30,000 to $32,000. The former, in particular, will be a critical point of interest in determining what happens next for Bitcoin and virtually all other cryptocurrencies.

  • Avoid Forex Trading During the Holidays

    #edgeforex #trading #market #stocks #money #usd #gold #forex #green #investing #ethical #holidays #loss #break #cryptocurrencies #law #bill #bitcoin holidays

    Trading forex during the Christmas holidays is a poor idea. During the Christmas season, forex trading becomes extremely difficult for traders. Instead of staring at the chart, a trader should spend that time with their children in the garden. However, if a trader desires to trade in a turbulent market, he must make certain assumptions.


    During such days, many traders take a long break from forex trading. During the Christmas and New Year holiday periods, it is difficult for traders to produce gains. Many seasoned and professional traders adhere to this practice of taking a trading break on specific days.
    As a result, traders should start trading far into the New Year once they have returned to their chart and life has returned to normal.


    According to tradition, Christmas Day commemorates the birth of Jesus on December 25, 1 BC. As a result, most countries observe this as a public holiday. Furthermore, the entire week around December 25th is recognised as a holiday in lieu.


    Most professional traders are hesitant to trade against low liquidity and excessive volatility at this moment. Banks will be absent from the market, and there will be a dearth of market-moving news. However, it is the most profitable time of year for scalpers. Any news storey might cause the market to jump in traders’ favour.


    During that moment, the majority of traders would close their positions. As a result of the wide spreads, brokers will benefit handsomely. Despite the fact that businesses would generate less profit owing to trade inactivity, they must pay their employees.


    Reasons to Avoid Forex Trading During Christmas


    The market will be unpredictable throughout the Christmas Holidays session, and your preferred currency pair may respond negatively.
    The major tycoons are well-versed in their industry, thus they would not take any chances at that moment. As a result, rather than monitoring the charts, they will spend their time on the beach with a cigar and a drink of martini. Furthermore, their inaction serves as a warning: do not trade.


    • Forex Market Volatility Is Extreme


    We know that there is an impulsive non-volatile trend and a corrective volatile trend in the currency market. This pattern reflects the engagement of market titans. Traders may easily make money during an urge since the market follows the levels better than at other times. As a result, there is a possibility of false break and stop-loss hunts.


    The proof of extreme volatility may drive the price nowhere after consuming your profits by producing false breaks. There is no way to generate a reasonable profit.


    True, forex brokers hike their spreads over the holidays. The fundamental cause for this is a lack of liquidity. As a result, tiny traders are exposed to the hazards of bid and ask proposals. It is up to the broker to decide when to increase the spread. It’s difficult to pinpoint a precise time.


    • Market situations that are unpredictable


    The forex market is a decentralised market in which no one can predict where the price will go in the future. All traders and investors profit from the forex market by correctly forecasting market possibilities. If the probability is correct, the trader will benefit. On the other side, if the probability is incorrect, the trader loses.


    Forex trading during the Christmas holidays is dangerous since the market is difficult to forecast because there is no solid trend. There is a chance that a bearish trade setup from a strong barrier may fail. Furthermore, due to poor liquidity, the entire day may swing within 15 pips or rapidly jump in a minute. Ordinary traders find it difficult to respond to that market scenario.


    • Prepare for the New Year by recharging your batteries.


    Working overtime may be harmful to your health as well as your intellect. Furthermore, if your A+ trade ideas are hitting stop losses, the market conditions may place further pressure on you. In that scenario, you should spend the time by taking a big breath of fresh air before beginning your lengthy run.


    Rather than studying the EURUSD chart on December 25, the greatest practice during the holiday season is to play with your children in the yard or visit your closest relatives.

    If you are unable to refrain from trading, keep in mind that the spike and spread may eat away at your prospective earnings. In such an instance, you should only trade with a bigger stop loss if you stick to the important levels.

  • Price Gap

    Price Gap

    #edgeforex #trading #market #stocks #money #forex #trader #broker #money #types #price #gap #opportunities #stockmarket #bitcoin gap

    What’s a Price Gap?

    When there are no new opportunities available for a period of time, a gap emerges in the charts. These gaps can be seen on bar and candlestick charts. You can tell whether there is a price gap when there is an empty space between the closing of one candlestick and the open of the next candlestick. Some markets, such as futures and stock markets, are more prone to gaps, whilst other markets, such as Forex, have far less gaps. 

    Price disparities can go in two directions: up and down. The term “gap up” or “gap higher” refers to the fact that the current candle’s low is higher than the preceding candle’s high.

    Types of Price Gaps

    Aside from price changes, there are four basic sorts of prices that do not display on the charts. 

    1. Common Deficits 

    The common gap is exactly what its name implies: common and dull. Because typical gaps are common price patterns, they do not indicate any intriguing information in the markets. The most common gaps are filled the most frequently. Common gaps are modest in size and do not provide a sufficient reward. The risk-reward ratio isn’t really worth it.

    2. Separation Gaps 

    Typically, the breakaway gap is not filled. Not to add that the price usually moves away from the breakout gap right away. When does this type of pricing disparity occur? A breakaway gap arises when price gaps cross exactly above a level of support or resistance. It is a recurring breakout pattern, with genuine breakouts occurring in the form of a gap. A breakaway gap is more powerful than you believe, and the larger the breakaway gap, the greater the candle following the gap, and hence the stronger the trend.

    3. Excessive Gaps 

    During a strong trend, a runaway gap arises when price continues to gap in the direction of the trend. During a strong trend, you will typically notice many runaway gaps. 

    Rather than waiting for a countertrend gap to fill during a runaway gap, simply follow the trend. You can also stay in your current trades if there is a runaway gap, which indicates strength. Experienced traders always do this to prevent putting too much of their cash at danger.

    Gaps in Exhaustion 

    Exhaustion gaps indicate that a trend is nearing the conclusion of its life cycle. Essentially, it occurs when the price creates a succession of price gaps in the late stages of a trend. These patterns may also indicate that a move is about to reverse direction. Some traders just abandon their trade when they notice exhaustion gaps after a given trend has been in place for some time. Others wait for a second signal to ensure that the trend is ending before exiting their investments.

    When is a Price Gap “Filled”? 

    A price gap is “filled” when the price returns to the level it was at before to the gap. In the days that follow, the price action returns to the level it was at the day before the gap.

  • Forex News January 22, 2022

    Forex News January 22, 2022

    #edgeforex #trading #market #money #forex #countries #dollar #currencies #trade #america #nasdaq #high #low #dollar #crypto #bitcoin nasdaq

    America

    For the third day in a row, stocks are battered and close near session lows.

    For the third day in a row, the main indexes are closing at or around their lows. The Dow and S&P 500 suffered their lowest week since October 20, 2020. (the Dow fell 1600 points or -4.57 percent ). The S&P 500 lost -5.68 percent for the week.

    The Russell 2000 ended at its 52-week low.

    The NASDAQ index is down 15.1% from its all-time high hit in November and is trading at its lowest level since June 2021. The NASDAQ plummeted -7.53 percent last week.

    Technical levels were violated, with the 200-day moving average breached in all three major indexes.

    The stock market was the focus this week, and with the earnings season just getting started (with mainly disappointing results from financials and Netflix thus far), one wonders if it will get much better.

    By the way, the Fed is scheduled to make a rate announcement on Wednesday. The talk is about whether they will accelerate the taper so that they may tighten policy sooner. In terms of its inflation mandate, the Fed is behind the curve, while the yield curve has already tightened. Nonetheless, the Fed continues to purchase bonds and mortgage-backed assets (which does not make sense).

    It’s usually darkest before it gets pitch black, but the optics aren’t fantastic.

    Other markets:

    •Spot gold is down $7.70 to $1831.20. The price is up $14 for the week after closing around $1817 last week. On Thursday, the peak price hit $1847.94. On Tuesday, the low price was $1805.78.

    • Crude oil is down $0.78 to $84.75. The week’s high was $87.10 on Thursday, and the low was today at $82.78 before recovering higher into the close. This week’s inventory statistics revealed increases in crude and gasoline supplies.

    US debt market

    • On Wednesday, the 10-year yield reached a day high of 1.902 percent. Last week, the yield was 1.788 percent. The current yield is 1.758 percent, down three basis points from the previous week’s finish. The stock market’s recent surge to the upside has energised the bearish.
    • However, since peaking and falling, stocks have separated themselves from the bond market, as traders have been more concerned on how greater inflation will lead to a tighter Fed, which will lead to weaker growth and lower stock prices.
    • The two-year yield is currently trading at 1.004 percent, having reached a high of 1.076 percent on Wednesday. The two-year yield finished at 0.969 percent on Friday, indicating that rates are higher in that area of the yield curve.
    • The CHF and JPY drew safe-haven money today, while the AUD, CAD, and NZD received risk-off flows. The USD got caught in the middle of these flows and ended the session mixed.

    Some technical levels in play for next week:

    • EURUSD: The EURUSD briefly traded above its falling 100-hour moving average today. This MA has a value of 1.1348. (and moving lower). At 1.1342, the price is slightly below it. The EURUSD is down for the week after ending at 1.1414 on Friday.
    • GBP/USD: The GBPUSD got closer to its 100-day moving average today (at 1.3539). The low for the day was 1.35446. That MA will be a benchmark for buyers and sellers next week.
    • USD/JPY: The USDJPY traded in a range of 113.58 and 113.629. The price is currently trading at 113.68 as we enter the weekend. In the coming trading week, the swing level will serve as a gauge for both buyers and sellers.
    •  
    • USD/CAD: The USDCAD has risen to its highest level since January 11, as well as the 38.2 percent retracement of the move from the January high to the January low, at 1.25871. The price is presently trading around 1.2580, which is a few pips below the retracement level. Traders will be expecting for a move higher in the next trading week, with the 100 day moving average at 1.26182. On January 11, the price fell below the 100-day moving average. A repositioning above gives the purchasers something to brag about.
    •  AUD/USD: After a volatile week, the AUDUSD is trading at session lows for the week. On Tuesday, the lowest price was 0.7169. On Thursday, the price touched a high of 0.7276. At 0.7277, it fell barely shy of its 100-day moving average. The price retraced practically the whole advance yesterday and today, with the price low reaching 0.71709. Moving below 0.7169 would enhance the negative bias, while holding support might result in a rotation back up.
  • Market-making brokers taking advantage of high leverage?

    Market-making brokers taking advantage of high leverage?

    #edgeforex #trading #market #stocks #money #forex #trader #broker #money #types #stockmarket #bitcoin broker

    Why do market makers supply so significant leverage? Given that a substantial percentage of forex traders lose money, do these brokers take advantage of the traders’ risk? Or do brokers route orders through the interbank network and profit from spreads?

    There are several sorts of brokers, and the quick answer is to utilise regulated brokers. There is a decreased possibility that the broker will work against the trader – and at least someone to complain to in such a circumstance.

    The fuller answer – while not exhaustive of all brokers – is that some move orders to the interbank network while others do not. Intermediaries are those who pass all orders to the network and make money from spreads and occasionally fees charged to users. 

    Orders from various merchants may be matched by market makers. For example, if one person goes short on EUR/USD and another goes long, both with the same amount, the orders balance each other out. There is no need to send the order to the interbank market in this scenario. 

    When the equilibrium is upset

    The issue emerges when the balance substantially shifts and everyone moves in one direction, and the broker fails to transfer the orders to the interbank network. In such instance, the broker is effectively pitted against its clients, creating a potentially dangerous conflict of interest. 

    Brokers relied on the Swiss National Bank’s guarantee to keep the 1.20 floor under 1.20 in the infamous instance of the “SNBomb” in January 2015. The EUR/CHF fell after the SNB abruptly removed the peg. As a result, some brokers went bankrupt.

    Even under normal circumstances, the previously described conflict of interest is troublesome. To begin, if all of the traders place the correct bet and the broker does not cover, there is a danger for both the broker and the traders – being unable to withdraw cash. 

    Second, it implies that these brokers believe that the majority of traders would not only lose money, but will also completely liquidate their accounts. In such scenarios, the brokers’ revenue is derived from the traders’ deposits rather than spreads — practically everyone would liquidate their accounts.

    The good, the bad, and the ugly of leverage 

    Leverage is a method used to make money by all sorts of traders, investors, and institutions. There is nothing intrinsically wrong with leverage since it permits markets to operate at a quicker pace. Even in the most stringent jurisdictions, the most careful banks employ leverage to protect themselves against larger loans by keeping just a modest amount of deposits. 

    People who take out mortgages leverage a little downpayment to purchase a property, and the majority of them pay down their obligations. 

    The issue arises when leverage becomes enormous, transforming a minor deal into a large wager.

    Leverage levels in the triple digits are unquestionably high, and some brokers take advantage of the urge to invest only $1,000 to make a $100,000 deal. This can have disastrous effects because the possibility to make huge gains also implies a high likelihood of the account being destroyed. 

    When an account disappears suddenly, not only is the money gone, but so does the lesson. 

    It is the trader’s obligation not to utilise excessive leverage, even if the broker offers it. More realistic levels should be employed, which will result in fewer earnings – but a greater opportunity of learning from bad trades before terminating the account.

    Some brokers attempt to persuade traders to utilise excessive leverage. It is the trader’s obligation to utilise less leverage or move to a different broker if they believe their trading activities are dangerous. To return to the beginning, the recommended practises are to trade with a registered broker and to use modest leverage, especially during periods of high liquidity.

  • Bitcoin falls to a six-month low of $38,000

    Bitcoin falls to a six-month low of $38,000

    #edgeforex #trading #market #stocks #money #forex #trader #forex #interest #rates #fall #low #stockmarket #bitcoin

    cryptocurrencies, reaching its lowest level in six months. 

    On Friday, the biggest token fell as high as 8.7 percent, capping a three-day decline. According to Coinglass, a cryptocurrency futures trading and information platform, almost 236,000 traders had their positions cancelled in the last 24 hours, with liquidations reaching $867 million. 

    Other cryptocurrencies were equally down as investors exited riskier bets during a turbulent week for global markets. Ether went below $3,000, losing up to 11%, while Solana, Cardano, and Binance Coin also declined. 

    Bitcoin has had a rough start to the year, with values down more than 40% from their peak in early November.

    Digital assets have suffered particularly in recent days as a result of a broader tech selloff, increased regulatory risks, and fears about tightening US monetary policy. 

    Regulators in the United Kingdom, Spain, and Singapore recommended tougher limits on crypto-asset advertising to inexperienced investors this week, while the Russian central bank proposed a ban on Thursday. 

    Rumors of Russian mining restrictions, the implications of tapering programmes, and persistent regulatory worries in specific countries are presently assuming more weight in trade and investment choices than the underlying long-term fundamentals.

    “At the same time, rising use and adoption of Bitcoin in high-inflation nations produces a confused market picture, leading to a lack of definite direction and momentum in either direction,” the report says.

    In the immediate term, trading is choppy and directionless, with additional decline possible. 

    A technical pattern based on a momentum indicator known as the weekly relative strength index suggested that Bitcoin’s downturn might be poised for a break. On Friday, the indicator slipped into an area that has previously followed Bitcoin selloff floors. 

    Bitcoin’s escalating tech correlation is taking holders on a wild ride. 

    “Bitcoin and the larger crypto market continue to be vulnerable to the vagaries of macro forces. 

  • Different types of FOREX trading platforms

    Different types of FOREX trading platforms

    #edgeforex #trading #market #stocks #money #forex #trader #forex #interest platforms #industry #rates #crude #oil #stockmarket #bitcoin platform

    Trading FOREX is a highly sophisticated industry; as a kind of internet trading, it necessitates a thorough understanding of currencies, geopolitics, business, and other topics. Even with all of this knowledge, it is tough to develop a lucrative business and maintain profitability while trading currencies. 

    However, if you decide you want to start trading FOREX, one of the first things you’ll need to do is establish a personal trading account (this might be a live or practise account, depending on how you want to get started). So, where do you go to create an account?

    That is not the first thing you should ask; rather, you should inquire as to what form of trading account best suits your trading style and what is accessible (before choosing a provider to set up your FOREX account with). 

    There are various sorts of online FOREX trading platforms where you may establish an account, so here’s a short summary of how they differ. 

    The first criterion used to classify forex trading platforms is whether or not they may be downloaded. Downloadable trading platforms are essentially apps (or software) that can only be accessible on the device on which they were downloaded and installed (this could be a mobile device or a computer).

    Non-downloadable platforms are web-based and may be accessed from any device with internet connectivity. All you have to do is access the site and input your log-in information. 

    When selecting a downloadable or cloud-based platform, it is a matter of preference as to how and where you trade (accessibility should be a key question alongside functionality requirements). Keep in mind that some software will only run on local devices they are installed on, such as FOREX trading software installed on a PC.

    • Many FOREX platforms employ complicated programming languages that enable users to create and deploy trading algorithms or execution vehicles (although this functionality is not used by the majority of users, depending on your level of programming expertise). Online forex trading platforms are categorised into three types based on their programming language: 
    • MetaTrader 4 and MetaTrader 5: Arguably the most popular trading platforms among FOREX traders. 
    • ActTrader: Offers both downloadable and non-downloadable versions. 
    • Currenex: Has a complicated version for pros, Currenex Viking, and a simpler version, Currenex Classic, for less experienced users. 
    •  TradeStation: TradeStation is a Lua-based platform. 
    •  cTrader: This gives you direct access to the currency trading market. Because they are also an Electronic Communications Network platform, they have this access. 

    Forex trading may be a very profitable business, but it is also a very hazardous kind of trade. If you decide to trade FOREX, you should take your time, study as much as you can, and never risk more than you can afford to lose. 

    Hopefully, this has provided you a fast overview of the many types of trading platforms available and what distinguishes them.

     Before selecting a platform/provider, you should conduct more study on each kind and select the one that you believe will provide you the highest chance of success in forex trading.

  • Silver’s New Paradigm Shift Is Taking Shape

    Silver’s New Paradigm Shift Is Taking Shape

    #edgeforex #trading #market #stocks #money #forex #trader #forex #interest #rates #bond #rising #rates #crude #oil #stockmarket #bitcoin crude

    Fundamentals

    The 30-Year Bond interest rate is rising to 2.162 percent, an increase of more than 2%. The 10-Year Note is now trading at 1.859, up 4.9 percent. Interest rates are rising, especially at the low end of the market. The 10-Year Note is inverted, which means that short-term interest rates are rising faster than long-term interest rates. 

    Chairman Powell is talking about tapering and says the Fed would consider interest rate rises in the future to combat inflation. The Dow Jones is down 500 points, the Nasdaq is down 264 points, and the S&P is down, indicating that an increase in interest rates is bad for the markets.

    “Higher interest rates, or the prospect of them, will dampen the economy.” 

    Brent crude oil is now trading at $87 per barrel. WTI is now trading at $84.50. These costs are a stumbling block for the economy. 

    It appears more likely that if interest rates rise, it will be done only once, maybe by 25 basis points. The Fed will most likely do the bare minimum to demonstrate its control over the economy, but we already know what the markets will do if interest rates increase.

    Already, the markets are on the verge of another meltdown. The Fed does not want the stock market to have a significant correction, therefore it will proceed with caution when raising interest rates. 

    When you combine the Omicron factor with China’s lockdown, it adds another drag to the economy. Russia’s threats against Ukraine, as well as escalating tensions with the United States and Western Europe (NATO), only contribute to the world’s economic uncertainties. Russia looks to be preparing an invasion of Ukraine. This might be another black swan occurrence that disrupts the energy markets, which is why crude oil is nearing $90 per barrel. If the Ukraine issue worsens, petroleum may quickly reach more than $95 per barrel.

    A confluence of variables is challenging the foundation of supply everywhere. The price of gold and silver might skyrocket. Silver is the canary in the coal mine, and it will most likely go first. Silver is the world’s most undervalued asset. It is evident that the Fed does not have control over inflation, and it is unknown whether this inflation will be transitory or long-term. It is extremely difficult to cut prices once they have been raised. There is a great deal of ambiguity in many areas. 

    We appear to be in a period of transition and transformation to a new economic system or level. It looks to be heading towards Bitcoin and digital currency.

    It appears that it is just a matter of time until central banks begin to create some type of digital currency. A critical question is whether any digital currency will be supported by anything other than government promises, or if one or more will be backed by gold or a basket of precious metals. China has already taken the lead in digital money, employing an internal digital Yuan. There are numerous uncertainties regarding whether visitors will be able to use it and if they will be able to use it outside of China, but it is evident that China’s central bank is ahead of the game. All they have to say is that it is gold-backed, and they will be well ahead of any other monetary unit.

    Silver

    We’ve been long silver since it reached $22.81. Silver is breaking out, closing at $23.47, up approximately 55 cents or 2.29 percent. This morning, silver had a significant reversal. Rising interest rates are not a negative for precious metals. The Fed hiked interest rates in December 2016, and gold reached $1517 by July. We have been in a decline since August 2020, but we have now reached a significant low. This is only the start of a massive rebound that will take the price back to the prior highs around $30. Silver is a difficult metal to trade. It’s been difficult if you’ve been holding silver since March 2020. However, we are on the approach of a significant advancement.

    As interest rates rise, the precious metals markets will reach a bottom. Silver has broken over the daily VC PMI levels and is now its route to the weekly objective of $23.99. 

    Gold is on the rise. We purchased a contract for $1815.20 right before the market opened today. Based on our Variable Changing Price Momentum Indicator, we encouraged all of our traders to take the daily Buy 1 signal at $1813. (VC PMI). Gold reached its initial goal of $1818 before retreating. Gold has triggered a buy trigger, thus we propose adding additional contracts.

    Gold

    Both gold and silver are on the verge of a significant rise. If gold breaks beyond $1874, the next high would be around $1920. If gold rises over that level, it will challenge $2062. 

    Check out our Marketplace service, Mean Reversion Trading, to discover more about how the VC PMI works and to receive weekly data on the E-mini, gold, and silver.

  • Interpreting Economic Data

    Interpreting Economic Data

    #edgeforex #trading #market #stocks #money #forex #trader #forex #economic #data #inflation #dollar #bitcoin economic

    In order to trade better economic data, you must understand what the market is concentrating on. 

    Hundreds of economic data are produced each trading week, but only a small number of them are market movers. 

    This can happen simply because the market is not focused on that particular report, or the release is mostly in line with expectations. 

    You always see beginners questioning the usefulness of fundamental analysis because they see the numbers on US economic data, for example, coming out good but the market doing nothing or even the opposite. The market responds more to surprises or to specific topics on which it is focused.

     If an economic report comes out as predicted, there’s little to truly take away from it until the specifics indicate otherwise. Furthermore, if the market isn’t focused on that economic data, even if it surprises, there’s a good chance the market won’t move much. 

    To trade better economic data, you must understand what the market is concentrating on. If the market is focused on employment because the central bank has stated that it would modify monetary policy based on it, then inflation reports will not move the market as much, and vice versa.

    You should also be aware of where you are in the business cycle. When a country is just emerging from a recession, hardly one cares about inflation and instead focuses on jobs, durable goods orders, ISMs, construction permits, retail sales, and so on. If you are late in an expansion and inflation is high, inflation figures take centre stage because the central bank will move to slow it down, which will also temper economic growth. There is also some sort of hierarchy based on the country that releases the economic data. In general, US data are the most essential because the US has the world’s largest economy.

     “When the United States sneezes, the rest of the world catches a cold,” as the adage goes. 

    That’s only to emphasise how vital the US economy is. So, if the US economy goes well, it may produce a positive risk attitude (as long as the rest of the globe is performing well), and when the US data is excellent, the USD can actually decline, as we saw in 2020 coming out of the credit crisis. On the other side, poorer and weaker US data might contribute to negative risk sentiment, causing the USD to rise as a safe haven. For example, the market is now preoccupied with inflation figures.

    Why is this so? Because the US inflation rate is more than double the Fed’s objective of 2% per year and is continually rising. This, in turn, causes the market to price in a quicker tightening process by the Fed and all of the consequences that may result, such as an economic slowdown, policy mistake, recession, and so on. The market no longer cares about unemployment claims or some UK or EU statistics, for example, since what happens in the US will affect other markets.

    As you can see, there is more to consider when analysing economic data than just noting if the report is better or worse than predicted or whether the economic calendar indicates that the event is of low or high impact. To trade better economic releases, you need to have a larger perspective and filter what is significant in that specific situation.

  • Technical Analysis Of Dominant Currency Pairs

    Technical Analysis Of Dominant Currency Pairs

    #edgeforex #trading #market #stocks #money #forex #global #euro #dollar #surge #interest #inflation #dollar #bitcoin

    From mid-November 2021 to the middle of January 2022, the Euro broke out of a small congestion range that had held it locked versus the US Dollar for three months. However, immediate follow-through has not occurred, with technical positioning currently providing contradictory clues regarding further developments. 

    On the one hand, it seemed significant that the surge was unable to find even two days of momentum after prices had been inactive for so long. One could have assumed that pent-up breakout pressure would have driven the euro higher. It’s also worth noting that the move has paused around a multi-year inflection point near 1.15.

    From this vantage point, the rally seems corrective, with a healthy retest near previous support in the mid-1.15 zone before the cycle of lower highs and lows that began in May 2021 is restarted. This scenario might be confirmed with a closure below 1.1355, followed by a break of rising counter-trend support. 

    However, it is impossible to overlook the fact that the retreat following the first advance came to a halt squarely on a downward-sloping barrier linking big peaks over the duration of the long-term trend. This might imply that a bullish breakout has already happened and that the retreat is only a corrective move before another push higher.

    Buyers look to be in for a long road ahead in this scenario, as a flurry of back-to-back barriers in the shape of past support levels line up to impede advance. Regaining a strong foothold above the 1.17 mark appears to be a must for making a compelling case for a long-term bullish trend reversal. 

    The contradictory indications on the technical side are echoed by sentiment data. Retail traders support Euro increases by a razor-thin margin of 54.56 percent. Crowd positioning is normally a contrarian indication, so the net-long setting may reflect a bearish argument, but the split is so close to 50/50 that the signal appears weak for the time being.

    Nonetheless, the net-long skew has increased by 3.4 percent over the previous week and 5.2 percent over the previous session. This somewhat strengthens the bearish thesis, implying that a change toward a more Euro-negative stance mismatch may be in the works. However, such reasoning does not appear to be actionable in the absence of other proof.