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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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. A video on how to interpret these indices can be found in the Global Prime’s Research section.
The US Dollar debacle, one that’s become all too familiar, stays the course as the dust settles in the aftermath of the Jackson Hole’s Symposium where Chairman Powell laid out the grand strategy of a Fed firmly committed to stick to its ultra-loose monetary policy even in the scenario where the labor market returns back to full employment.
If Thursday’s movements on the aftermath of Powell’s speech were centered around the bond market, Friday portrayed needed adjustments in the valuation of both the USD and equities. In the case of the former, the S&P 500 and Nasdaq ended the week with fresh record highs while the USD extended its multi-month downtrend.
The two currencies capitalizing the most in this environment of a Fed engaged in not just endorsing higher inflation but actively seeking it include the Australian Dollar and ride the coattails the Kiwi. These two commodity-linked currencies are an excellent vehicle to express this view via their hedging nature against inflation. If we throw into the mix the fact that equities are thriving, it’s an adder of appeal in AUD, NZD.
In the case of the NZD, the strength was retained even if on Friday Assistant Governor Christian Hawkesby reminded us that the RBNZ also sees scope to let inflation “spend some time above the mid-point of the target range in the future”. These comments reinforce the agenda of the RBNZ to execute a lower-for-longer strategy in NZ rates.
Meanwhile, the Pound failed to show fireworks by not living up to the expectations for a pick up in vol on the back of BoE Governor Andrew Bailey’s remarks to the virtual Jackson hole symposium on Friday. No new relevant information was shared by the policy-maker, who claimed “We are not out of firepower by any means”, admitting that the Bank has leeway for looser policy, including lower rates into negative as well as an expansion in the range of assets it purchases.
Last but not least, the episode of sudden Yen strength on Friday came as a result of Japanese Prime Minister Shinzo Abe announcing his plans to resign for health reasons and leave office as soon as a new successor is appointed. The announcement led to a major selloff in both the Japanese stocks market and the Yen crosses. The rationale behind the movement had to do with concerns that amid the absence of Abe, there might be a new regime of policies potentially away from the expansionary monetary/fiscal policies and structural reforms.
The bottom line, and what we are left with, is a Forex market spinning back to life with plenty of instruments in active buy or sell-side campaigns courtesy of the imbalance of flows in the AUD, NZD, EUR, GBP on one side and the USD, CHF, CAD on the other side. The JPY can be isolated for now until the balance tilts bearish again.
By the way, as a word of caution, if you are going to be trading the markets today, be aware that not only is a public holiday in the UK, but we also will experience month-end flows. Account for these two circumstances as part of your trading by adjusting the time you trade and/or be aware that sudden spikes may occur out of nowhere.
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In this section, I short-list the markets that meet the criteria, or are about, in order to engage on a directional trend off higher timeframes through a 15m chart entry. To get a deeper dive into the markets included in this section, watch my daily video.
This selection is done after analyzing markets through key metrics (Fractals and SMT) in different timeframes (4h and daily). A video on the power of the SMT can be found here “How To Trade Forex Trends Like A Pro“. The video “Fractals + SMT: The Multi-timeframe Functionality” is also a Must-Watch to fully grasp this style of analysis.
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 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!
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.
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.
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