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EUR Keeps Ruling, Equities Still Pressured

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In many ways, Tuesday's script resembled Monday's price action as the EUR and the CHF continue to be the main winners, even if this time the CAD also joined the bullish party as Oil rose to the best levels in  weeks. The AUD and NZD remained weak again as chatter builds up that the RBA will step up its easing measures near term.

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. 

In many ways, Tuesday’s script resembled Monday’s price action as the EUR and the CHF continue to be the main winners, even if this time the CAD also joined the bullish party as Oil rose to the best levels in 6 weeks. The AUD and NZD remained weak again as chatter builds up that the RBA will step up its easing measures near term.

In terms of the USD performance, its sluggishness prevailed, as American Democrats and Republicans kept making the right sound bites and feeding into the narrative that a fiscal stimulus deal is still possible. US House Representative Pelosi said she is ‘optimistic’ that a deal could be struck, playing down Tuesday’s deadline.

Pelosi said: “It isn’t that this day was a day that we would have a deal, it was a day that we would have our terms on the table to be able to go to the next step.” Pelosi and Mnuchin are set to meet later on Tuesday. However, today’s response by Mr. Market was clearly one of a ‘glass half empty’, acting with notable skepticism that an agreement will be done pre-election judging by the late selloff in equities.

The JPY and GBP both meandered around with no discernable directional bias. The chart of the GBP/JPY speaks a thousand words with the pair chopping around amid the balance of flows in two currencies that remain subject to the unraveling of new risk dynamics and Brexit talks/UK lockdowns respectively. Not much to see…

As per the hot trade of the day, I’d like to highlight a trap pattern that has emerged off the USD/CAD in the 4h timeframe that meets the pre-conditions to make it a rather attractive sell-side proposition. In today’s video I lay out the explanation that is leading me to make such call upon a retest of a role reversal area around the 1.3150 vicinity.

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: FXStreet

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.

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