Imbalance Of Flows Mainly In Yen And Kiwi
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Imbalance Of Flows Mainly In Yen And Kiwi

Authored by 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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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. 

There has been and continues to be for the most part a serious entanglement in currency flows with a very limited number of pairs exhibiting congruence in trends when studying the combination of 4-hour and daily charts. A few exceptions exist but not a whole lot.

There was a chance that last week’s FOMC could ignite new life to the markets but other than a near-term spike, the market has spoken and it judges Powell’s stance in this new ‘average inflation targeting’ as not sufficiently committal towards more easing.

The S&P 500 has fallen for 2 weeks in a row following diminishing prospects of US fiscal stimulus, the FOMC not filling the void, extremely high valuations, a controversial US election and the pick up in COVID leading to renewed global lockdowns on the rise.

The only multi timeframe trends to be found as per the combination of 4h+daily where an acute imbalance of flows has and still exist involve crosschecking the weakest links against either the Yen or Kiwi. The Yen has been in a way front-running and exceeding in proportional terms the move down in stocks while the Kiwi has been invigorated by Central Bank-related news, not as dovish as anticipated.

On Friday, Finance Minister Robertson told Bloomberg TV that the RBNZ has made it clear and provided “certainty” by stating that it will stand pat on rates “until at least March next year. ” The statement by the NZ FinMin reinforces the view from RBNZ’s forward guidance and even exceeds it as previously the talk was for February to cut rates.

Heading into this week, the series of fundamentals events lined up are not precisely very encouraging to see the majority of currencies breaking away from the current ranges. At least not in the likes of the US Dollar or the Euro. More chances exist of movements in the Pound or the Yen amid the vol around the EU-UK trade talks and stocks. The Kiwi will also be a major contender to see a spike in vol mid this week as the RBNZ monetary policy is due. Pay attention nonetheless to Fed’s Powell, BoE’s Bailey, RBA’s Debelle appearances and Flash PMIs.

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Insights Into Market Studies

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. 

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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