The Daily Edge

Matching strong vs weak currencies

forex trends
What immediately caught my attention in the last 24h of Forex trading activity was the contrasting performance of the British Pound against the Japanese Yen or the Swiss Franc. In order to understand the sell-side pressure that hit the British currency, one must be reminded of the high-stakes context the United Kingdom finds itself in.

Let’s get started…

Scan of the forex market

forex trends
To see an expanded version, right-click and select ‘open link in new tab’. The indices show the performance of a currency vs a G8 Forex basket. Indicators are available to use these measures via Tradingview and MT4.

 

What immediately caught my attention in the last 24 hours of Forex trading activity, was the contrasting performance of the British Pound against the Japanese Yen. In order to understand the sell-side pressure that hit the British currency, one must be reminded of the high-stakes context the United Kingdom finds itself in as part of the Brexit trade negotiations.

These talks between the EU and UK representatives are going down to the wire. The latest information suggests that the EU is ready to threaten the United Kingdom by pulling out of Brexit talks if the latter refuses to compromise. Michel Barnier, the Chief Brexit negotiator, said that further negotiations would be pointless if the UK does not change its hard-line stance in certain areas.

With the above in mind, and taking into account Thanksgiving in the US, chances are that most of the action to find opportunities will be concentrated in the London session. Case in point, as the video below demonstrates, there is a short setup in the GBP/JPY right ahead of the London open via my proprietary currency strength micro-mechanics technique.

Hot trade of the day

In this section, I pick a market or several ones that presented an opportunity based on the concepts I teach. My video analysis below elaborates on the logic behind the trade.

Economic indicators & events

Source: Forexfactory. If interested in the best ‘free of charge’ News Indicator that displays data on past and future news in the Forex market via MT4, check this YouTube video. The indicator allows you to save time and avoid mistakes.

 

Important footnotes

Market structure 

Markets evolve in cycles followed by a period of distribution and/or accumulation. To understand the principles applied in the assessment of market structures, refer to this video. Fractal breakouts is at the epicentre to assist us in the analysis of chart structures.

Market momentum

In order to assess the market momentum of a particular asset, I’ve promoted the idea of using what I call the smart money tracker. The settings and the indicator can be accessed via our Discord room, where traders from all walks of life interact frequently. In this video, I go through the layout and all elements of the Discord room in great detail.

Projection targets 

The usefulness of the 100% projection resides in the symmetry and harmonic relationships of market cycles. By drawing a 100% projection, you can anticipate the area in the chart where some type of pause and potential reversals in price is likely to occur, due to 1. The side in control of the cycle takes profits 2. Counter-trend positions are added by contrarian players 3. These are price points where limit orders are set by market-makers. You can find out more by reading the tutorial on The Magical 100% Fibonacci Projection.

 

About the author

Ivan Delgado

Ivan Delgado is a decade-long Forex Trader. Feel free to follow Ivan on Youtube. Join thousands of traders who follow Ivan's insights to increase their profitability rate by learning the ins and outs of how to read and trade financial markets. Ivan has you covered with in-depth technical market analysis to help you turn the corner.