Featured The Daily Edge

Cautious Tone Prevails, The Japanese Yen Rules

Stock exchange market is falling. Red arrow graph is showing a fall on a black trading board. Selective focus. Horizontal composition with copy space.
With the US election just one week away, with no prospects of a fiscal stimulus package ahead of it, and with chatter of further lockdown restrictions in Europe amid the spike in COVID-19 cases, the Yen continues to be the dominant performer as stocks keep falling. The Kiwi and Gold have been two assets outperforming too. 

Let’s get started…

Scan Of The Markets

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 FX basket. 

With the US election just one week away, with no prospects of a fiscal stimulus package ahead of it, and with chatter of further lockdown restrictions in Europe amid the spike in COVID-19 cases, the Yen continues to be the dominant performer as stocks keep falling. The Kiwi and Gold have been two assets outperforming too.

One would think the risk-off dynamics would keep the strong bid tone in the US Dollar, but with so much uncertainty on the cusp of the outcome about the US election, buyers took the foot off the gad pedal on Tuesday, only for renewed strength to re-emerge in the last few hours. On the contrary, news that France and Germany may be re-imposing nation-wide lockdowns is not sitting well with the Euro.

The EUR is therefore the main laggard, followed closely by the CHF, and the CAD. The latter is going to be subject to increased volatility later today as the Bank of Canada meets to decided on its latest monetary policy stance. Before the event, in the Asian session, we would also find out about the Australian inflation figures, likely to inject some intraday volatility in the Aussie (neutral on Tuesday).

As part of the hot trade of the day, I’d like to highlight an opportunity to short the CAD/JPY that popped up early in Europe. Despite it fell short to meet the 3:1 risk reward target, is a great example of a trade meeting all the specifications to be taken as part of the trading course that I am going to release to the Global Prime community shortly. In the video below I walk you through the rationale in shorting CAD/JPY.

If you found this fundamental summary helpful, just click here to share it!

Hot Trade Of The Day

To see an expanded version, right-click and select ‘open link in new tab‘. In this section I pick a market or several ones that presented an opportunity to buy on weakness or sell on strength based on the higher timeframes outlook. My video analysis below will further elaborate on the logic behind the trade.   

Insights – Hot Trade Of The Day

In this video analysis I dissect the information above. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter and manage a position, hence the video is intended as educational in nature and not financial advice. 

If you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.

Recent Economic Indicators & Events Ahead

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 I produced. The indicator allows you to save time, avoid mistakes. It’s spot on!

Important Footnotes

MARKET STRUCTURES

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 epicenter 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 for years the idea of using what I call the smart money tracker. The settings and the indicator can be obtained via our Discord room, where traders from all walks of life interact frequently. In this video I lay out the elements I look into to call trend directions.

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.