Featured The Daily Edge

Classic Risk-Off, Equities Sold Globally

Stock exchange market is falling. Red arrow graph is showing a fall on a black trading board. Selective focus. Horizontal composition with copy space.
The proverbial finally hit the fan in risk dynamics with very sharp falls in equities all over the world as the combination of an uncertain election outcome in the US, coupled with no fiscal stimulus package and spooky prospects of national lockdowns in Europe again was a burden to heavy to bear for Mr. Market. It was a one-way street with the US Dollar and the Japanese Yen the main beneficiaries. 

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. 

The proverbial finally hit the fan in risk dynamics with very sharp falls in equities all over the world as the combination of an uncertain election outcome in the US, coupled with no fiscal stimulus package and spooky prospects of national lockdowns in Europe again was a burden to heavy to bear for Mr. Market. It was a one-way street with the US Dollar and the Japanese Yen the main beneficiaries.

One may notice the Pound did really well judging by the quick deterioration in financial conditions. The culprit here, once again, has to do with Brexit-related headlines that are speculating about Brexit talks having made progress with a deal possible by early November a possibility. The market has understandably factored that in. The Euro, ahead of today’s ECB policy meeting, also saw buy-side interest.

The three fiats that form what’s often referred to as the commodity currencies complex (AUD, NZD, CAD), without exception, were out of love right off the gates in Europe, with the bloodbath getting worse around the early stages of the US session as the S&P 500 and the Nasdaq accelerates its overnight losses. Given the panic selling, even the likes of Gold and Silver sold off amid the global dash to the USD & JPY.

A special mention deserves the CAD, taking a more aggressive yet brief hit on the outcome of the Bank of Canada policy decision. The BOC plans to keep interest rate near zero until 2023 in a projection that assumes no widespread lockdowns are coming back, and that there will be a vaccine by 2022.

The selection of the hot trade of the day includes the pairing of the British Pound against the Australian Dollar in what appears to be an ideal technical setting to expect further strength conditional to getting a pullback into a critical area that constitutes a break of structure. This idea to get long exposure circa 1.8320/30 is backed up by the structure of fractal waves as depicted via my proprietary order flow script and the fact that it has formed what’s a major trap pattern in the 4h chart.

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.

Instagram

Error validating access token: The session has been invalidated because the user changed their password or Facebook has changed the session for security reasons.